When it comes to different types of Hong Kong financial licenses (License 1 to License 9), each license represents a specific financial activity, providing licensed institutions with opportunities to offer diversified services in the Hong Kong financial market. These licenses not only signify the institution's compliance status but also showcase Hong Kong's strong appeal as an international financial center. Through these licenses, institutions can actively participate in securities trading, futures contract trading, foreign exchange trading, and other fields, providing investors and clients with professional investment advice, asset management, financing services, and other diversified financial solutions.
License 1 - Dealing in securities: Licensed institutions can engage in securities trading activities, such as buying and selling stocks, bonds, and other securities products.
License 2 - Dealing in futures contracts: Licensed institutions can engage in futures contract trading activities, involving various commodity futures, financial futures, etc.
License 3 - Leveraged foreign exchange trading: Licensed institutions can provide leveraged foreign exchange trading, allowing clients to control larger trading positions with smaller amounts of capital.
License 4 - Advising on securities: Licensed institutions can provide advisory services on securities investments, helping clients make investment decisions.
License 5 - Advising on futures contracts: Licensed institutions can provide advice on futures contract investments, assisting clients in futures investments.
License 6 - Advising on corporate finance for applying for securities licenses: Licensed institutions can provide advisory services on corporate finance for companies applying for securities licenses, assisting enterprises in fundraising activities.
License 7 - Providing automated trading services: Licensed institutions can provide automated trading services, including trading using computer algorithms.
License 8 - Securities margin financing: Licensed institutions can provide securities margin financing, helping clients finance their securities investments.
License 9 - Asset management: Licensed institutions can provide asset management services, managing clients' investment portfolios to achieve their investment goals.
Requirements for Application
Legal framework: Applying institutions must be companies registered and established in Hong Kong or overseas companies registered with the Companies Registry in Hong Kong.
Competence: Applying institutions need to demonstrate a mature business structure, effective monitoring systems, and professional personnel to manage and control business risks.
Responsible officers: At least two responsible officers must be appointed for each regulated activity, directly supervising the relevant activities.
Licensed representatives: Individuals engaging in regulated activities need to become licensed representatives, meeting fewer qualification and experience requirements.
Shareholder qualifications: All major shareholders holding more than 10% of shares must meet the appropriate person criteria of the Securities and Futures Commission.
Financial resources: Applying institutions need to maintain sufficient financial resources, including meeting the minimum paid-up capital requirement.
Executive requirements: Applying institutions need at least two executives responsible for company management, with one appointed as an executive director.
Regulatory assessment: The Securities and Futures Commission of Hong Kong will assess the applying institution's solvency, financial condition, qualifications, business experience, compliance capability, reputation, and financial soundness.
Regulatory requirements: Licensed companies must meet requirements for paid-up capital and liquid capital, client funds must be kept segregated, maintain financial solvency and internal compliance records, retain financial records in accordance with international accounting standards, and provide regular reporting and disclosure.
Reporting and auditing: Licensed institutions need to submit periodic financial resources returns, submit audited accounts and relevant documents to the Securities and Futures Commission.
Ongoing supervision: Once obtaining a financial license, licensed institutions need to continuously comply with regulatory requirements and undergo regular regulatory reviews.
Applying for and obtaining these financial licenses is not an easy task. In different types of financial activities, institutions need to meet strict requirements in terms of legal, financial, personnel, and other aspects to ensure they have robust business capabilities and compliance levels. As the Hong Kong financial market continues to develop, regulatory requirements are also evolving continuously.