Japan's financial regulator has issued a warning to domestic brokerages, advising against offering offshore-listed leveraged ETFs that track the nation's stock market, citing concerns that such products could amplify market volatility and undermine the price discovery mechanism.
The Financial Services Agency has published a revised Q&A guidance document on its official website, addressed directly to securities firms operating in the country.
The document states that leveraged ETFs tracking Japanese equities are not permitted to trade on domestic exchanges, and as such, the sale of these offshore-listed products constitutes improper conduct under current regulations.
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