The BOSC optimizes the regulatory framework for single-day leverage and reverse products to ensure orderly market transactions

On 24 July, the CSRB issued a revised circular today, requiring a flexible leverage structure for leverage and reverse products whose capacity is highly affected by changes in the market. Under this structure, the leverage multiplier can be adjusted on a daily basis within the existing ceiling (i.e., double the leverage product and two times the reverse product). As a result, the product provider may, if necessary, adjust the target leverage for the product to a lower number, thus providing for a larger space management product during a high trade volume. The leverage multiplier of the product at the next transaction date will be disclosed after the day-to-day closure. The potential daily adjustment of the leverage multiplier will also help to increase investor awareness of the leverage and reverse product as a single-day product, reminding investors that the product is not suitable for more than one day. (Hong Kong SEC)