Hong Kong SFC Optimizes Regulation Framework for Leveraged and Inverse Products

The Hong Kong Securities and Futures Commission (SFC) has issued a revised circular requiring leveraged and inverse products to adopt a flexible leverage structure, allowing daily adjustments of leverage multiples within the existing limits. The upper limit for leveraged products is set at 2 times, while the upper limit for inverse products is -2 times. Product providers may lower the target leverage multiple when necessary to better manage products during periods of high trading volume. The leverage multiple for the next trading day will be disclosed after the market closes each day. This initiative aims to deepen investors' understanding of leveraged and inverse products and remind them that these products are not suitable for holding beyond one day.

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