Going forward, when launching high-risk funds such as leveraged and inverse funds, the prospectus must disclose the possible 'maximum loss rate.' Additionally, if losses exceeding 20% have occurred in similar funds previously launched by the fund company, the relevant product and loss magnitude must also be disclosed.
The Financial Supervisory Service announced on the 25th that it has prepared a 'Fund Core Risk Standard Plan' containing such content and will revise related disclosure forms to be implemented from September 30th. In light of the recent loss incident involving an overseas real estate fund, the service has stepped up risk guidance so that consumers can more easily understand investment risks in public funds.
The standard plan applies to 10 types including ▲overseas real estate funds ▲overseas REITs ▲equity-linked funds (ELF) ▲derivative-linked funds (DLF) ▲leveraged funds ▲inverse funds ▲covered call funds ▲target-term funds ▲precious metals ▲overseas indirect reinvestment, and others. These are funds that have had large-scale losses, carry high structural risk, or where consumers may easily misunderstand the product characteristics.
Accordingly, starting from the end of next month, when newly launching these fund types, the prospectus must clearly disclose key investment risks. Commonly, 'principal loss risk' must be stated, and type-specific risks such as exchange rate fluctuation risk (overseas real estate funds), leveraged risks including negative compounding effects (leveraged/inverse funds), and risks from underlying asset fluctuations (ELF/DLF) will be included up to a maximum of 3 items depending on the fund type.
For leveraged and inverse products, the maximum loss rate under extreme scenarios must also be disclosed. For example, if the underlying asset of a single-stock leveraged 2x product falls by 30%, which is the daily price limit, the maximum daily loss rate for the product is expected to be 60%.
=============================
So this is what the FSS chairman came up with without even taking a vacation... I guess that's what they're saying?
Is it really necessary to make this into a news article... Do they not have enough work to do?
▶ Original source: https://news.nate.com/view/20260825n21574?mid=n0304
