Licensing requirements
Do you need a licence?
Depending on the nature of the business, a company and related individual should apply for one or more RA license(s) to conduct the proposed regulated activities. RAs are defined in the SFO and comprise the following types of regulated activities.
Type 1 |
Dealing in securities |
Type 2 |
Dealing in futures contracts |
Type 3 |
Leveraged foreign exchange trading |
Type 4 |
Advising on securities |
Type 5 |
Advising on futures contracts |
Type 6 |
Advising on corporate finance |
Type 7 |
Providing automated trading services |
Type 8 |
Securities margin financing |
Type 9 |
Asset management |
Type 10 |
Providing credit rating services |
Type 11 |
Dealing in OTC derivative products or advising on OTC derivative products* |
Type 12 |
Providing client clearing services for OTC derivative transactions* |
Type 13 |
Providing depositary services for relevant collective investment schemes (CIS)* |
Source: SFC
*Type 11 and 12 RAs will take effect upon the commencement of new a licensing regime for these RAs. Type 13 RA will take effect 2 October 2024.
What are the major requirements in the licensing application?
The company is required to fulfil the following principal requirements in order to obtain a licence.
- A legal structure
- Fit and proper criteria
- Substantial shareholders
- Senior management
- Manager-in-charge of core functions (MICs)
- Responsible officers (ROs)
- Licensed representatives (LRs)
- Financial resources
A legal structure
- Hong Kong incorporated company
- An overseas company registered with the Hong Kong Companies Registry (i.e. a branch)
Fit and proper criteria
Demonstrate that it is fit and in the following criteria:
- financial status or solvency
- relevant educational or other qualifications or experience
- competent, honest and fair
- reputation, character, reliability and financial integrity
Substantial shareholders
- Fit and proper substantial shareholders, senior management and other employees
- A substantial shareholder not having a “close link” with the corporate license applicant may be allowed to provide less information in the application form
Senior management
The senior management that holds the responsibility for ensuring the maintenance of standards of conduct and adherence to procedures includes:
- Directors of the corporation,
- ROs of the corporation, and
- MICs
Manager-in-charge of core functions (MICs)
- MICs of overall management oversight function and the key business line function must be ROs
Responsible officers (ROs)
- Appoint not less than two ROs to directly supervise the conduct of each RA being applied for
- At least one of the proposed ROs must be an Executive Director
Licensed representatives (LRs)
- All personnel carrying on regulated activities need to be licensed as a LR (if not an RO)
- Subject to similar fit and proper requirements as ROs
Financial resources
- Maintain paid-up share capital and liquid capital at all times not less than the specified amounts according to the Securities and Futures (Financial Resources) Rules
How long does it take to obtain an SFC licence?
The processing of an application submitted to the SFC by a new industry participant normally takes approximately:
- 7 business days (for a provisional licensed representative application);
- 8 weeks (for a normal licensed representative application);
- 10 weeks (for a responsible officer application); or
- 15 weeks (for a licensed corporation application).