Advising on first leveraged and inverse products

13 Mar 2017

International law firm Simmons & Simmons has advised four fund managers simultaneously on the development and listing of the first leveraged and inverse products tracking Hong Kong equity indices. Each fund manager will launch a suite of four products, two leveraged products and two inverse products. All sixteen products will be listed on the Hong Kong Stock Exchange on 14 March.

The products will be launched by two Mainland Chinese fund managers and two South Korean fund managers: China Asset Management and CSOP Asset Management, and Mirae Asset Global Investments and Samsung Asset Management, respectively.

The leveraged products aim to provide investment results that closely correspond to twice the daily performance of the Hang Seng Index or the Hang Seng China Enterprises Index (the “H-Shares Index”), whereas the inverse products aim to provide investment results that closely correspond to the inverse daily performance of the Hang Seng Index or the H-Shares Index.

Unlike traditional exchange traded funds, these products are designed to be used for short-term trading or hedging purposes. They are not intended for holding longer than one day, or for long term investment.

Commenting on the work, partner Eva Chan said: “The listing of these sixteen new products, the first to track Hong Kong equity indexes, represents a significant maturing of Hong Kong’s leveraged and inverse products market. Our work for these four fund managers demonstrates our unrivalled capacity to help clients develop and launch innovative and market-leading products. As the firm that advised on the very first leveraged and inverse products in Hong Kong, Simmons & Simmons continues to be at the forefront of the city’s financial development, and we are pleased to mark our clients’ success today.”

The Simmons & Simmons investment funds team, based primarily in Hong Kong and Singapore, has been the legal adviser to approximately 80% of the exchange traded funds (ETFs) and all the leveraged and inverse products that have been listed in Hong Kong.

The Simmons & Simmons team was led by financial markets partners Rolfe Hayden and Eva Chan, and assisted by Ivy Yam, Natalie Kong, Stella Wai, Louise Ma and Miki Shi.

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