The SFC today issued a revised circular expanding listed structured funds to
include single-stock leveraged and inverse products referencing highly liquid,
ultra-large-cap Hong Kong-listed shares. For all leveraged and inverse products
the SFC requires providers to continuously monitor product capacity to support
target leverage or inverse exposure, maintain adequate buffers and promptly
notify the SFC of potential operational disruptions. For single-stock leveraged
and inverse products the regulator added tighter provider eligibility standards
and mandates robust business-continuity plans to mitigate elevated operational
risk. The SFC also requires automatic suspension of the product if the
underlying Hong Kong-listed stock is temporarily paused or suspended; existing
safeguards remain, including a maximum leverage cap of +2x to -2x.
