Summary of Hong Kong financial license classifications and application requirements No. 1-9

Hong Kong financial license classifications 1-9 and

Application conditions

Summary of Hong Kong financial license classifications and

Application process

，How to officially obtain No. 1 from the Hong Kong Securities and Futures Commission、2Number、4Number、6No. 9 financial license,How to become a Hong Kong financial institution with international asset management business qualifications and securities investment consulting service qualifications，Today, the editor uses the Internet to sort out and summarize mainland companies' applications for financial licenses in Hong Kong.，If there are any deficiencies or errors，Welcome to leave comments and corrections。

Hong Kong as a major offshore and non-offshore center for Asia’s financial markets,Regardless of the maturity of the regulatory framework、The perfection of the public trading market and the richness of financial products, etc.,Both are at the forefront of the international financial market and are the preferred platform for international investors to invest in Asia.。The Hong Kong market implements a financial license management system,Financial institutions can conduct stock trading at the same time、financial derivatives、Trading in foreign exchange and gold。

9The license is a Type 9 regulated business qualification license issued by the Securities and Futures Ordinance of Hong Kong.,i.e. asset management license。Hold this license,It means obtaining a "pass" in the international capital market,Not only can you directly participate in overseas investments,,It can also manage and utilize funds from overseas investors。4No. 1 license is a license approved by the Hong Kong Securities and Futures Commission to provide securities investment consulting services.。

As domestic securities futures、asset Management、international trust、private equity firm,How to apply to the Hong Kong Securities and Futures Commission to successfully obtain these financial licenses,Comprehensively participate in international capital market investment,Expand the scope of investment targets,Enrich investors’ product choices;On the other hand, you can seize investment opportunities in overseas markets.,Improve the company's asset management capabilities and market competitiveness,Entering the ranks of international asset management companies。

After receiving the financial license from the Securities and Futures Commission of Hong Kong,Companies will be eligible to offer shares to domestic and foreign institutions、fund、Various financial products and services such as bonds。Leverage the Hong Kong capital market platform,Not only can we develop more products such as overseas real estate or stock funds,,We can also launch value-added services such as investment immigration and investment consulting.,Provide more diversified services to high net worth clients。Hong Kong financial license classification from 1 to 9,The difficulty of applying for various types of licenses is also different.。

Such as Hong Kong Asset Management License No. 9

Application conditions

,Hong Kong Securities and Futures Commission regulations,Requires 2 Hong Kong licensed responsible persons,The licensed responsible person needs to have 3-5 years of continuous public performance records in the capital market and must pass a series of rigorous examinations and qualification reviews.。at the same time,Enterprises also

Require

Have a physical office address in Hong Kong,Have an experienced management team to assist in running the company。

generally,Obtaining an independent Hong Kong asset management license No. 9 is an endorsement of a company’s strength。

Practical Application of Licensed Regulated Activities Category 1 Securities Trading Providing trading/brokerage services in stocks and stock options to clients Buying and selling bonds for clients Buying/selling mutual funds and unit trust funds Placing and underwriting securities Category 2 Futures Contract Trading Providing trading/brokerage services in index or commodity futures Buying/selling futures contracts to clients Category 3 Leveraged foreign exchange trading Carrying out foreign exchange transactions for clients on margin Category 4: Providing advice on securities, providing clients with investment advice on selling/buying securities, issuing research reports/analyses on securities Category 5: Providing advice on futures contracts, providing clients with investment advice on selling/buying futures contracts, issuing research reports/analyses on futures contracts Category 6: Providing advice on institutional financing, acting as a sponsor for an initial public offering for a listing applicant, on "Corporate Acquisitions"、"Code on Mergers and Share Repurchases" Providing advice to listed companies on compliance matters under the Listing Rules Category 7 Providing automated trading services and operating electronic trading platforms that match customer orders Category 8 Providing securities margin financing Providing financing to customers who buy stocks and using the customers' stocks as collateral Category 9 Providing asset management Managing securities or futures contract investment portfolios for customers on a discretionary basis Managing funds on a discretionary basis Category 10 Providing credit rating services to companies、Preparation Report No. 1 on the Credit Reliability of Bonds and Sovereigns：Securities trading 1. Providing trading/brokerage services for stocks and stock options 2. Buying and selling bonds for clients 3. Buying/selling mutual funds and unit trust funds for clients Placing and underwriting securities No. 2：Futures contract trading 1. Provide customers with the buying and selling of index or commodity futures 2. Provide customers with index or commodity futures brokerage services 3. Buy or sell futures contracts for customers 3.：Leveraged foreign exchange trading uses margin trading to conduct foreign exchange transactions for customers No. 4：Providing advice on securities 1. Providing investment advice to clients on selling or buying securities 2. Issue research reports or analyzes on securities No. 5：Provide advice on futures contracts 1. Provide investment advice to clients on selling or buying futures contracts 2. Issue research reports or analyzes on futures contracts No. 6：Advising on institutional financing 1 Acting as sponsor for an initial public offering for a listing applicant 2 Advising on the Corporate Acquisition、Advising on mergers and share buy-backs code 3 Advising listed companies on compliance matters under the Listing Rules No. 7：No. 8, an electronic trading platform that provides automated trading services to match customer orders.：Provide securities margin financing to customers who buy stocks and use the customer's stocks as collateral 9Plate：Provide asset management. Manage securities or futures contract investment portfolios for clients on a discretionary basis. Manage funds on a discretionary basis. Nine types of capital licenses.

Require

:If an organization wants to apply to become a licensed corporation，Need to meet a series of

Require

：

1. A company incorporated in Hong Kong or a non-Hong Kong company registered with the Hong Kong Companies Registry
2. The company has a suitable business structure、Good internal control system and qualified personnel，Ability to manage risks that may be faced in the business
3. For each type of regulated activity applied for，At least two responsible officers must be appointed to directly supervise the relevant activities。
4. For each type of regulated activity applied for，At least one responsible person can supervise the relevant business at all times
5. Among the responsible personnel planned to be appointed by the organization，At least one of them must be from the China Securities Regulatory Commission

Require

Executive Director under 6、All executive directors of an institution must seek approval from the Securities and Futures Commission，To become a responsible officer of a corporate body under the above provisions of Responsible Officer，Their competency must also pass the test prescribed by the China Securities Regulatory Commission.。

When a company applies for a financial license or applies to become a registered institution，The Hong Kong Securities and Futures Commission will make the following judgments on licensed corporations and registered institutions in accordance with Section 129 of the Securities and Futures Ordinance，The specific content is as follows:

1. The subject qualification must be a company incorporated in Hong Kong or an overseas company registered at the Hong Kong Companies Registry
2. Competence of licensed corporations and registered institutions when conducting relevant business，Manage the risks you may face when doing business，Specifically, having the right business structure in place、Good internal control system and qualified business personnel；(For details, see："Guidelines on Competence" separately published by the China Securities Regulatory Commission、Code of Conduct for Licensed or Registered Persons、"Management of Licensed or Registered Persons"、Supervision and Internal Control Guidelines")。
3. Responsible person(1)Each type of regulated activity must appoint at least two responsible officers to directly supervise the relevant activity；(2)Each type of regulated activity must have at least one responsible person who can supervise the business at all times。

If the role arrangement does not cause conflict，The same person may be appointed to supervise more than one type of regulated activity；(3)At least one of the responsible persons is an executive director as defined in the Securities and Futures Ordinance；(4)All executive directors must seek approval from the Securities and Futures Commission；(5)When submitting your license application，Submit all applications for approval of proposed responsible officers to the SFC together；4.Major shareholders, etc. must have the qualifications of suitable candidates. Major shareholders、senior staff、any other person employed in relation to a regulated activity，Any other person associated with such activities，must be suitably qualified。

For details, please refer to Section 129 of the Securities and Futures Ordinance。After consulting relevant information，When applying for a license，There is no restriction on SPVs such as trust plans and asset management plans being major shareholders.。However, according to Section 129 of the Securities and Futures Ordinance，To examine the financial capabilities and solvency of major shareholders，It may be difficult for an SPV to pass the review if it is a major shareholder。

1. The financial capacity of the entity, licensed corporations and registered institutions when conducting relevant business，Sufficient share capital and liquid capital must be maintained(Liquid Fund Index：Assets that can be quickly converted into cash or are already in cash form)。For example，When applying to provide asset management (Type 9 license)，Licensed corporations and registered institutions should pay a minimum share capital of HK$5 million and maintain liquid capital of HK$3 million.。

According to the sponsor in Hong Kong，Based on whether client assets can be held，Can be divided into big and small brands。Big names (unlimited) can hold client assets，Just like domestic public funds,，Client’s assets can be transferred directly to the company’s account，The entire asset can be invested and managed as a unified account。And these investors may not be professional investors (PI)。

But just because of this，In order to protect ordinary investors，The Securities and Futures Commission of Hong Kong has become stricter on such licenses

Require

，Not only does it have extremely high levels of paid-up capital and liquid capital,

Require

，There are also high requirements for licensed responsible persons (ROs).

Require

。So the market price of big brands is higher，Can do more business，Therefore, large listed institutions will tend to apply for or purchase large licenses.，Facilitate business development。

And No. 9 license (small license) cannot hold customer assets，Therefore, separate accounts must be set up for each customer，and may not hold these assets，Can only be managed on behalf of，And investors also have relative restrictions。Because separate account management is a bit troublesome，Therefore, this type of license may be more suitable for private equity funds，Not suitable for broader fund projects。6.Purchase relevant insurance licensed corporations and registered institutions when applying for relevant licenses，Insurance should be purchased with an amount corresponding to the business。

There are two ways to apply for a Type 9 license by establishing a subsidiary and acquiring a mainland private equity firm. For private equity institutions that want to apply for a Type 9 license，There are generally two ways to apply，One is to set up a subsidiary in Hong Kong，The second is to acquire a company that has successfully applied for the No. 9 license.。

Geshang Financial Management learned from a mainland private equity manager that has obtained Hong Kong’s No. 9 license，At present, mainland private equity institutions that already own license 9 rarely obtain license 9 through acquisitions to enter the international market.，Generally, larger mainland private equity institutions will choose to set up subsidiaries in Hong Kong to obtain the Hong Kong No. 9 license plate.，In this way, on the one hand, the names of Hong Kong subsidiaries and mainland private equity institutions can be consistent or similar.，Conducive to the promotion and inheritance of the brand，on the other hand，Since the acquisition of a Hong Kong company that has successfully applied for the No. 9 license also requires a series of applications and preparation of required materials，The time cost is basically the same as that of setting up a subsidiary.。

therefore，Few mainland private equity firms choose to obtain Hong Kong’s No. 9 license through direct acquisition.。

Four aspects

Require

The necessary conditions for mainland private equity to apply for the No. 9 license have been revealed by a mainland private equity manager who has obtained the Hong Kong No. 9 license.，The process of applying for Hong Kong No. 9 plate is relatively simple，The materials that need to be prepared mainly include business planning and basic company information.，However, since mainland private equity managers may not be familiar with Hong Kong’s legal business，therefore，Most private equity firms tend to use intermediaries to handle matters

Application process

，The required time is at least 6 months，Most private equity firms generally require 9-12 months。

According to the knowledge of Geshang Financial Management，If mainland private equity institutions want to obtain the No. 9 license by setting up subsidiaries, they need to meet many rigid conditions.，If applying for a license, two Hong Kong licensed responsible persons are required，The licensed responsible person needs to have a record of continuous public capital market performance for 3 to 5 years.，At the same time, companies also

Require

Have an actual office address in Hong Kong, etc.，Specifically：① On the corporate side, private equity institutions that plan to apply for a license in Hong Kong must meet the following requirements:

Require

：

1. Overseas corporations incorporated in Hong Kong or registered with the Companies Registry；
2. The financial status and solvency are good and all company personnel have certain qualifications and experience.；
3. The company must demonstrate that it has an appropriate business structure、Good internal control system and qualified personnel；
4. A licensed asset management company must have at least two responsible officers；
5. At least one responsible officer must be a member of the board of directors；
6. If you need to hold client assets，Minimum paid-up share capital HKD 5 million，Liquid capital is no less than HKD 3 million，In addition, the company needs to comply with strict risk control mechanisms。

also，The China Securities Regulatory Commission also

Require

At least one responsible officer must be based in Hong Kong，in order to directly supervise the relevant business，when needed，The SFC must have immediate access to at least one responsible officer of the asset management company。Except for the person in charge，Any person who is a licensed asset management company or conducts asset management activities on its behalf must be licensed as a representative。

②In terms of personnel, individuals including relevant responsible personnel and relevant licensed representatives may apply for a license from the Securities Regulatory Commission，Must demonstrate competence and integrity standards to the SFC，Be a fit and proper person to carry out regulated activities。③The assessment focus of the Hong Kong Securities Regulatory Commission The Hong Kong Securities Regulatory Commission will evaluate applicants (including companies or personnel) from 4 aspects，At the same time, licensed institutions and individuals affiliated with licensed institutions must comply with Hong Kong tax laws and regulations.。

1. Financial condition and solvency；
2. Academic or other qualifications and experience，and considerations in this regard must have regard to the nature of the functions proposed to be performed by the applicant；
3. Are you capable of doing your job competently?、conduct relevant regulated activities honestly and fairly；
4. Reputation、character、Reliability and financial soundness。

④Continuing responsibilities after business operation After obtaining the license，Private equity firms must maintain fit and proper qualifications，and comply with all applicable provisions of the Securities and Futures Ordinance and its subsidiary legislation，and codes and guidelines issued by the Securities and Futures Commission，Audited accounts and financial statements must be submitted regularly，When certain company events or information need to be changed，The Securities and Futures Commission of Hong Kong should be notified within a specific time limit。From the current point of view，It is not very easy for mainland private equity institutions to obtain Hong Kong’s No. 9 license。

According to the regulations of the Securities and Futures Commission of Hong Kong，If a company wants to successfully apply for the No. 9 plate, it must bind two qualified responsible personnel.，And the China Securities Regulatory Commission stipulates that when the person in charge leaves the company，The company's No. 9 license was subsequently invalidated.，Therefore, if you are planning to apply for the No. 9 license，On the one hand, the person in charge of the company will face greater pressure on qualification certification in the short term.，On the other hand, it is also difficult to find a suitable licensed person in the market to apply for a license as the person in charge of the company.；In addition, according to Geshang Financial Management,，The China Securities Regulatory Commission is also very strict on the issuance of licenses.，The timing of dealing cards is also uncontrollable，According to some private equity reports，It is becoming more and more difficult to approve the No. 9 license plate，may become more stringent，We do not rule out the possibility of regulatory tightening of licensing in the future.。

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