Singapore to Beat Hong Kong as Synthetic ETF Center [Bloomberg]
On August 29th, the Hong Kong Securities and Futures Commission announced enhanced investor protection for ETFs. "The relevant synthetic ETF managers have been required to top-up the collateral level for each of the domestic synthetic ETFs to achieve at least 100% collateralization to ensure there is no uncollateralized counterparty risk exposure arising from the use of financial derivatives to replicate index performance." Full Release.
Bottom Line: More regulation and investor protection may erode the gap between Hong Kong's $8 billion market for such funds and Singapore's $1 billion market.
Synthetic ETFs facing uncertain future [FT]
Hong Kong Approves Deutsche Bank Synthetic ETFs