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.
Read More:
Synthetic ETFs facing uncertain future [FT]
Hong Kong Approves Deutsche Bank Synthetic ETFs
Too many investors do not understand whats in these ETFs. It's hard to justify NOT increasing the regulation of these investments.
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