Such products are not transparent and saddle the buyer with most of the risk, says Philip York of trading firm Alt224, who argues for a ban.
Asset managers are offering newer structured products, which incorporate ideas from smart beta strategies, to raise yields.
The regulator improves the process of QFII applications and quotas, easing limits on asset allocation and structured products.
With its new Hong Kong securities dealing and advisory licence, EFG Financial Products is targeting a build-out and sees the city as its most important centre globally after Zurich.
And tighter rules on investment-product sales following the crisis are not helping matters, according to a report from the US funds-research house.
Institutional investors continue to use structured products to adjust their risk profiles and diversify risk, says Societe Generale's Marc Saffon.