The Hong Kong Securities and Futures Commission has issued a revised circular that allows listed structured funds to include Single Stock Leveraged and Inverse (L&I) Products referencing highly liquid Hong Kong-listed mega-cap stocks. The change extends a framework that previously covered only overseas-listed shares and broadens the range of products available to Hong Kong retail investors and issuers. The expanded scope excludes companies dually listed in Hong Kong and the Mainland and shares listed on Mainland exchanges. The revised circular also strengthens investor safeguards. Providers of all L&I Products must continuously monitor their ability to support the targeted leveraged or inverse exposure, maintain a reasonable buffer and promptly notify the SFC of issues that could disrupt product operations. For single stock products, providers are subject to enhanced eligibility criteria and must maintain business continuity plans with defined contingency and defensive measures. Single Stock L&I Products linked to Hong Kong-listed shares must be automatically suspended if the underlying stock is halted or suspended, while the existing maximum leverage range of 2x to -2x remains in place. The SFC cited strong uptake since the March 2025 launch of single stock products on overseas shares. By May 2026, their assets under management and average daily turnover had risen more than 302 times and 136 times to HKD 106 billion and HKD 9.3 billion respectively, accounting for 80% of total L&I Product assets under management and 78% of turnover.

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