China leverage clampdown to hit two-tier structured products

Product issuers look to derivatives to boost returns, but options are limited

china stop sign
Regulators' strict approach is leaving little room for financial innovation, say investors

Chinese asset managers say a recent clampdown on the amount of leverage they can include in certain investments will limit the appeal of popular two-tier structured products. Derivatives could provide an alternative, but asset managers face numerous hurdles to using the instruments.

The China Securities Regulatory Commission (CSRC) cut the leverage caps for investment products managed by private funds under securities companies, futures companies and asset management funds on July 18.

"The new p

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: