The head of Iran's Securities and Exchange Organisation's Investment Fund Supervision Centre said fluctuation ranges for leveraged funds have been increased from 3% to 4% to accelerate their equilibrium process and reduce buying and selling queues, ISNA reported on July 7.

Ali Akbar Iranshahi said the purpose of increasing the fluctuation range was to speed up the equilibrium process for leveraged funds. Due to the leverage coefficient of these investment funds, their portfolios change more than the defined fluctuation range during strong upward or downward market trends.

"For these situations, it was decided that the fluctuation range of assets within the fund should be different," Iranshahi said. The anticipated effect is that leveraged funds will reach equilibrium sooner with this decision.

Iranshahi noted that during strong upward or downward market trends, these funds' portfolios experienced greater changes than their defined fluctuation ranges. "With this development, we will see a reduction in buying and selling queues for these funds," he said.

When asked whether other infrastructures related to leveraged funds would change, the head of the Investment Fund Supervision Centre said: "Currently, there is no decision on the agenda for other infrastructures of these funds to change."

The adjustment reflects ongoing efforts by Iran's securities regulator to improve market efficiency and reduce volatility in leveraged investment products. Leveraged funds use borrowed capital to amplify potential returns but also increase risk exposure during market fluctuations.

The Securities and Exchange Organisation's decision aims to better align fund performance with underlying market movements whilst reducing the build-up of unfulfilled buy and sell orders that can distort pricing mechanisms.

Market participants expect the expanded fluctuation range will provide more flexibility for fund managers to adjust portfolios in response to market conditions without triggering automatic trading halts or creating artificial price distortions.