SFC expands listed structured funds

Hong Kong's Securities and Futures Commission has added two new products to its listed structured funds for retail investors.

Single-stock leveraged and inverse products, and defined outcome-listed structured funds have become increasingly popular in overseas markets, the SFC said in a statement on Thursday.

These products would come in handy for investors looking for trading or hedging tools for popular individual stocks listed overseas, as well as for those seeking price discovery tools for overseas exposure during Asian trading hours, it said, adding that they can also provide investors with more customized investment options.

In balancing the potential benefits and risks associated with investors’ exposure to these complex and novel products, the SFC said it has built in additional guardrails and measures in its regulatory framework.

For single-stock L&I products, only those referencing a highly liquid mega-cap stock listed on a major overseas exchange would be accepted, and these products should have a maximum leverage factor of 2x to -2x, it said.

STAFF REPORTER