Global Trustee and Fiduciary Services Bite-Sized Issue 7 2026

12 AI CRYPTOASSETS CYBER DORA IOSCO MONEY MARKET FUNDS SUSTAINABLE FINANCE/ESG ASIA PACIFIC AUSTRALIA EUROPE IRELAND LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 7 | 2026 Quick Links SFC Expands Listed Fund Universe to L&I Products Referencing Hong Kong-listed Single Stocks with Enhanced Safeguards On 5 June 2026, the SFC issued a revised circular to broaden the range of listed structured funds to include Single Stock Leveraged and Inverse (L&I) Products referencing highly liquid Hong Kong- listed mega-cap stocks. Considering strong market reception for Single Stock L&I Products over the past year, the SFC says that the time is ripe to extend the regulatory framework from products referencing overseas-listed stocks to those based on popular Hong Kong-listed stocks. The SFC goes on to say that this will not only expand retail investors’ tools to customise investment exposure but will also address issuers’ growing interests to launch products with Hong Kong equities as underlying. To support orderly market development over the long term, the SFC has explains that it has also strengthened investor safeguards in the revised circular. For all L&I Products, product providers are now explicitly required to continuously monitor their products’ capacities to support the targeted leveraged or inverse exposure, maintain a reasonable buffer, and promptly notify the SFC of any potential issues disrupting product operations. For Single Stock L&I Products, the SFC has also introduced enhanced eligibility criteria for product providers, together with requirements to establish robust business continuity plans to mitigate heightened operational risks for such products. The SFC says that these plans should set out clear contingency and defensive measures with defined triggers for activation. In addition, the SFC requires automatic trading suspension for Single Stock L&I Products referencing Hong Kong-listed stocks if their underlying shares are halted or suspended from trading. Other safeguards for these complex products continue to apply, including a maximum leverage factor of 2x to -2x. Link to Revised Circular here SFC and HKMA Conclude Joint Consultation on Amendments to Clearing Rules for OTC Derivative Transactions On 5 June 2026, the SFC and the Hong Kong Monetary Authority (HKMA) issued joint consultation conclusions on standardising the calculation periods for each year under the Clearing Rules for the over-the-counter (OTC) derivatives regulatory regime. The SFC says that respondents to the consultation expressed broad support for the proposed approach to accommodate future Calculation Periods and the corresponding Prescribed Days under the Clearing Rules. There was general consensus that the proposal increases certainty on the clearing obligation, thus enabling more effective internal planning for market participants. In a move to further increase the efficiency of the operation of the Clearing Rules, the SFC and the HKMA consulted the public in early 2026 on proposals to designate, once and for all, standard calculation periods for each year with effect from 1 March 2027. This would improve on the current approach where the existing list of calculation periods specified in the Clearing Rules needs to be updated by legislative amendments regularly to facilitate the central clearing of OTC derivative transactions. In view of broad market support, the SFC and the HKMA will proceed with the legislative process to introduce the proposed amendments to the Clearing Rules and aim to bring the amendments into effect on 1 March 2027 , i.e., the starting date of the proposed new series of Calculation Periods. Link to Joint Consultation Conclusions here