Hong Kong regulators warn market about synthetic ETFs

hkma
HKMA reminds on ETFs and RMB-denominated products

The Hong Kong Monetary Authority (HKMA) has issued guidance on synthetic exchange traded funds (ETFs) after a Hong Kong magazine wrote a six page article on the dangers of a particular strain of ETF. The synthetic model is popular because it accesses the A-shares A50 index without having a qualified foreign institutional investor (QFII) quota.

"This ETF mimics the A-shares market movement and gives investor access to participate in A-shares' performance in China," says a spokesperson at Hang Sen