Hong Kong license number 9：Application requirements、Overseas channels and cost analysis

In recent years, mainland private equity institutions’ willingness to go overseas has continued to increase.，Chongyang Investment、Fushan Investment、China Shepherd Fund、Wangzheng Capital and other institutions have successively established subsidiaries in Hong Kong and issued fund products.。Increased demand for cross-border asset management、In the context of the growth of customers' overseas configuration needs and the acceleration of international business layout，Hong Kong Securities and Futures Commission Type 9 Regulated Activities License，Right now"Provide asset management"license，It has become one of the core financial licenses that private equity managers pay most attention to.。

For private equity institutions with overseas business plans，Hong Kong license number 9Not only is it an important compliance qualification for entering the international capital market，Also related to product release、overseas investment、Overseas fund raising and cooperation with international institutional investors and other key links。As the number of applicants increases，Approval standards、Responsible personConfiguration、Operational substance and compliance system requirements have also received more attention。

Regulatory Positioning and Business Value of Hong Kong License No. 9

Hong Kong implements financial license management system，If financial institutions plan to develop securities、futures、Leveraged Forex、asset Management、Regulated business such as credit rating，It is usually necessary to apply for the corresponding license from the Hong Kong Securities and Futures Commission。Hong Kong Securities and Futures Commission license categories cover No. 1 to No. 10，Category 1 is securities trading，Category 2 is futures contract trading，Category 3 is leveraged foreign exchange trading，Category 4: Advising on securities，Category 9 provides asset management，Category 10: Provision of credit rating services。

Hong Kong License No. 9 is a Type 9 regulated business qualification license established in accordance with the Securities and Futures Ordinance of Hong Kong，The core business scope is asset management。After a mainland private equity institution obtains the license，Usually means that it has the compliance basis to carry out regulated asset management business in Hong Kong，Can participate in overseas investment more conveniently、Issuance of related fund products，and attract overseas investor funds。

From the perspective of business value，9The reason why license plates are favored by private equity institutions，Mainly because it is highly consistent with the business model of private equity managers。Licensed institutions can focus onOverseas asset allocation、Fund management、Compliance layout for investment portfolio management and other businesses，At the same time, use more abundant overseas investment tools and market varieties，Serving high net worth clients、Cross-border allocation needs of family offices and institutional investors。

Hong Kong No. 9 License Application Rising Popularity and Approval Difficulties

at present，Hong Kong License No. 9 has become one of the most in-demand license types for many mainland institutions.。Some private equity institutions that have obtained license No. 9 believe that，This license can support customers’ overseas asset allocation、Investment consulting and diversified asset management related businesses，and help attract overseas funds to invest in the domestic market。

since last year，The number of private equity institutions applying for Hong Kong’s No. 9 license has increased significantly。Have market data statistics，June this year、7Month is the peak period for applying for No. 9 license，Explosive growth in application growth。The number of applications is rising rapidly，Also makes the approval cycle、Material quality、The arrangement of licensed personnel and substantive operational capabilities have become issues that organizations must deal with。

in practice，Hong Kong No. 9 license itself is more difficult to apply for。As the number of applicants increases，Regulatory versus institutional background、business plan、Compliance system、Internal control arrangements、The review of the qualifications of responsible personnel and the substance of local operations in Hong Kong has become more cautious。For mid-sized and new private equity firms，If a governance structure and compliance system that meets regulatory expectations cannot be established in advance,，The difficulty of applying will be further increased。

Core application requirements for Hong Kong Type 9 license

Hong Kong No. 9 license application is not completed by simply submitting documents.，Applicants need to be in staff、site、experience、System and business rationality meet the requirements of the Hong Kong Securities Regulatory Commission。Generally speaking，Application highlights include the following aspects：

1. The applicant organization usually needs to configure 2 Hong Kong digitslicensed responsible officer。
2. Licensed responsible persons generally need to have 3 to 5 consecutive years of、Publicly available capital markets performance record。
3. Responsible personnel need to pass a series of rigorous examinations、Qualifications and fit and proper assessment。
4. The applicant company needs to have an actual office address in Hong Kong，Reflect real operational arrangements。
5. The organization should have an experienced management team，To support the company’s continued compliance operations。

From the perspective of regulatory logic，The Securities and Futures Commission of Hong Kong is not only concerned about whether the applicant can obtain a license，Pay more attention to whether the institution has long-term、steady、Ability to conduct asset management business in compliance with regulations。therefore，Applicants need to have a business plan、financial strength、Personnel resume、Compliance Manual、Risk control system、Develop a complete plan for anti-money laundering arrangements and conflict of interest management。

Mainland private equity institutions that have obtained Hong Kong license No. 9

at present，A number of well-known mainland private equity institutions have obtained the "No. 9 License" for Hong Kong's asset management business。According to statistics，Fushan Investment、Jingtai Lifeng Assets、Bai Fang Assets、ivy assets、Tianma Assets、Infore Capital、Qiju Assets、Yifan Assets、Institutions such as Value Gravity have obtained relevant qualifications，Some of these institutions have obtained in the past one or two years，Some institutions completed their Hong Kong licensing layout earlier。

among large private equity firms，Chongyang Investment、Jinglin Assets、Danshui spring investment、Invest with a pure heart、Zhuque Investment、Oriental Harbor、Yitian Pavilion Investment，As well as Wang Yawei’s top trump assets, etc.，Also obtained Hong Kong license No. 9。The layout of this type of institution shows，Hong Kong’s licensed platforms are becoming an important infrastructure for the international development of mainland’s leading private equity firms.。

Comparison of the main compliance channels for private equity overseas

Although Hong Kong’s No. 9 license is highly consistent with the private equity asset management business，But not all institutions will directly apply for a license in the first stage。Combined with business scale、Customer structure、Product strategy and cost affordability，Private equity institutions can choose different paths to conduct overseas business。Currently, the more common compliance channels mainly include the following five categories:：

1. Shanghai-Hong Kong Stock Connect：Configurable Hong Kong market，However, the investment scope is mainly limited by the underlying stocks of Hong Kong Stock Connect.，Participating markets and varieties are relatively limited。
2. QII：You can borrow QDII quota from public equity and other financial institutions to invest overseas.，But usually you need to pay a certain channel fee；As QDII quota gradually becomes tighter，Channel fees are also increasing。
3. Set up a company in Hong Kong and apply for license No. 9：After obtaining the license, you can issue products and carry out asset management business in Hong Kong，However, the licensing process requires more manpower.、Material resources，The time cost is also higher。
4. Issuing products through overseas private equity managers：Institutions can participate as investment advisors，But you usually need to pay a certain amount of channel fees。
5. QDLP：Go overseas through the QDLP quota of overseas asset management companies，Generally applicable to products invested directly in corresponding overseas asset management companies。

Applicable boundaries of QDLP mode

QDLP is mainly for overseas hedge funds，Hedge fund products that can raise funds domestically and invest them in overseas asset management institutions。Normally，When domestic funds go overseas through QDII，Investment scope is mostly concentrated in stocks、Bonds, etc.，Cannot invest directly in hedge funds；Shanghai’s relevant policies allow raising RMB funds domestically through QDLP quotas，and invest directly in overseas products。

but，QDLP is more of an option for investors to allocate overseas markets.，The direct effect on private equity institutions building overseas asset management platforms is relatively limited.。Different channels have their own pros and cons，Organizations should consider customer needs、product strategy、management scale、Choose based on timing and compliance costs。

Costs and alternative routes to Hong Kong’s Type 9 license

The cost of Hong Kong No. 9 license is usually not only reflected in the application fee itself，Also includes responsible personnel remuneration、Hong Kong Office、Compliance Consultant、legal documents、Internal control system construction、Comprehensive investment in continuous compliance maintenance and operation management。For private equity institutions that do not yet have complete license requirements，Use managers who already hold No. 9 license as a channel，And participate in product issuance as an investment consultant，It is one of the more common models on the market。

There is a market view that，Because the cost of No. 9 license plate is higher，Some private equity institutions will choose to cooperate with licensed managers，Products are issued by the other party as the manager，Private equity institutions participate in investment management as investment advisors。This model can reduce early licensing costs to a certain extent，But at the same time, we need to focus on the boundaries of investment advisory authority.、Fee arrangement、Division of Compliance Responsibilities and Customer Disclosure Requirements。

OP Asset Management has certain market representation in this type of business。It obtained license No. 9 as early as 2003，And began to enter the Chinese mainland market in the fourth quarter of last year，Providing comprehensive services for mainland private equity institutions in issuing offshore funds。OP Asset Management recently cooperated with Shenzhen Daopu Capital，Daopu Capital plans to launch its first Chinese offshore fund with quantitative long-short strategy in the fourth quarter of 2016。

September 1 this year，OP Financial Group and OP Asset Management officially announced，Will invest HK$2 billion in cutting-edge funds on the OP Asset Management Fund platform。For the private equity overseas investment model，Private equity institutions that have obtained license No. 9 can usually set up private equity funds in Cayman，and operate in Hong Kong，Under the supervision of the Securities and Futures Commission of Hong Kong，Then trade through a brokerage firm，Customers can subscribe through Hong Kong securities firms。

The core reason why private equity actively applies for Hong Kong’s No. 9 license

Private equity institutions accelerate their application for Hong Kong license No. 9，Not driven by a single factor，But customer demand、market environment、The result of a combination of regulatory changes and the agency’s own development。The more prominent reasons currently include：

1. There is an expectation of RMB depreciation，Customer demand for overseas asset allocation increases。
2. Domestic market faces asset shortage，Higher cost of capital。
3. Domestic regulations are tightening，Organizations need to expand into international markets。
4. Overseas investment system is more mature，Investment varieties and tools are more abundant。

The expectation of RMB depreciation is an important reason for customers to request overseas allocation.。Some domestic clients hope to allocate domestic funds to overseas markets through private equity institutions，To avoid exchange rate fluctuations and strive for better investment returns。Since the stock market crash，Domestic customer risk appetite affected，Some product releases did not go smoothly in the first half of the year，It also further prompts institutions to look for more attractive overseas allocation solutions.。

Customer needs can be mainly divided into two categories：One category is domestic clients who want to invest domestic funds overseas through private placement.，to cope with depreciation pressure；The other type is domestic customers who already have assets overseas.，Hope to entrust professional private equity institutions to manage。For private equity institutions，Can we provide compliance、Stablize、Professional overseas asset management services，It is becoming an important competitiveness in maintaining customer relationships and upgrading business.。

Enrichment of investment tools and opportunities for international business expansion

In addition to customer needs，More abundant investment varieties and tools in overseas markets，It also promotes private equity institutions to accelerate the deployment of Hong Kong licenses。since last year，Many quantitative private equity firms are gradually participating in overseas markets。Since there are few tools available in China，And stock index futures are restricted，Quantitative strategy capacity and execution efficiency are affected to a certain extent，Therefore, institutions hope to expand strategic space through overseas markets.、Rich investment tools。

Policy changes such as Shenzhen-Hong Kong Stock Connect have also increased the demand of overseas investors to allocate Chinese assets.。After private equity institutions obtain relevant qualifications by going overseas,，Easier to gain recognition from overseas investors，And further expand the customer base of institutional investors。For large private placements，Hong Kong licensed platforms are not only overseas investment tools，It is also seeking funds from international institutions.、An important carrier to enhance brand credibility and realize global asset management layout。

Suggestions for handling Hong Kong Telecom

Hong Kong No. 9 license is suitable for people with clear asset management business plans、Stable management team、A private equity institution with compliance operation capabilities and long-term international layout willingness。We recommend that before initiating an application, organizations，Complete the business model demonstration first、Responsible personnel matching、Hong Kong operation structure design、Compliance system establishment and cost budget assessment，Avoid problems due to insufficient qualifications during the application process、Unclear business plans or insufficient operational substance affect the approval results。

For institutions that are not suitable to directly apply for the No. 9 license in the short term，You can also evaluate channel cooperation first、Investment advisory participation、QII、QDLP or other compliant overseas routes，And decide whether to establish its own Hong Kong licensed platform based on the medium and long-term strategy。No matter which path you choose，compliance boundary、Division of responsibilities、Information disclosure and ongoing regulatory obligations should be considered beforehand。

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