Hong Kong SFC Mandates Daily Leverage Ratio Adjustments for Leveraged ETFs Within ±2x Limit

According to Money Today, Hong Kong's Securities and Futures Commission (SFC) on July 27 mandated flexible leverage structure adjustments for single-stock leveraged and inverse ETFs, restricting daily ratios within the ±2x cap amid overheated trading in Samsung Electronics and SK Hynix products. The measure, designed to curb excessive market volatility, requires asset managers to adjust leverage ratios daily and requires investors to recognize these products are for intraday trading only.

South Korea's financial authorities are reviewing Hong Kong's regulatory framework as a potential precedent for future amendments. A regulatory official stated authorities are examining whether similar mechanisms could be applicable to Korean markets, though current Korean law requires shareholder approval to modify fund contracts, making daily adjustments impractical under existing regulations.