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

Hong Kong license number 9It's the mainlandprivate equityLayout overseasasset ManagementOne of the most popular compliance qualifications in business。With the Double Ninth Festival investment、Fushan Investment、China Shepherd Fund、Wangzheng Capital and other private equity institutions set up subsidiaries in Hong Kong、Issuance of fund products，Hongkong9license plateThe popularity of applications continues to rise，There are even queues of applications in the market、Places are in short supply、Stricter approval situation。

For overseas asset allocation needs、For private equity managers who want to attract overseas funds or expand international investment tools，9The license is not only an important passport to enter Hong Kong and international capital markets，It is also about setting up offshore funds.、The core compliance basis for conducting cross-border asset management business。

The definition and business value of Hong Kong No. 9 license

Hong Kong implements financial license management system，If financial institutions need to conduct stock trading、financial derivatives、Forex、Gold and other related businesses，It is usually necessary to obtain corresponding licenses based on specific business types.。Hong Kong Securities and Futures CommissionLicense types under supervision include No. 1 to No. 10，Among them, No. 1 is securities trading，2No. for futures contract trading，3Leveraged Forex Trading，4No. for advising on securities，9We provide asset management，10No. for providing credit rating services。

9No. 9 license is a type 9 regulated business qualification license regulated by the Hong Kong Securities and Futures Commission in accordance with the Securities and Futures Ordinance.，The core business scope is to provide asset management。Mainland private equity institutions hold license No. 9，It means that it can participate in overseas asset management business in a compliant capacity，Not only can direct overseas investment，There are also opportunities to attract funds from overseas investors，It has become one of the most demanded Hong Kong financial licenses by many mainland institutions.。

For private equity managers，9The actual value of the license plate is mainly reflected in the following aspects:：

• Can carry out overseas asset allocation related business，Serving customers’ global investment needs。
• Can use more abundant investment tools and trading varieties，Improve strategy capacity and portfolio flexibility。
• Offshore fund structure can be established，and carry out asset management business under Hong Kong’s regulatory framework。
• Can enhance the recognition of international capital markets，Attract foreign investors and institutional funds。
• It can provide a more mature compliance path for the two-way allocation of mainland and overseas funds.。

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

in recent years，There has been a significant increase in the number of private equity firms applying for Hong Kong’s No. 9 license。Market feedback shows，9license as an asset management business license，Highly matched with the business attributes of private equity managers，Therefore, the number of applicants has continued to increase since last year.。There are statistics，June this year、7May is the peak period for applying for No. 9 license，Application growth explodes。

After application popularity increased，The approval pressure of the Hong Kong Securities Regulatory Commission has increased simultaneously。Some private equity institutions reported，9The application threshold for the No. 1 license itself is relatively high.，Regulation may be further tightened in the near future，The difficulty of approval is gradually increasing。For medium-sized and above private equity institutions，License application is no longer just a matter of submitting materials，It also involves personnel qualifications、Business essence、internal control、Systematic Review of Compliance Structure and Sustainability。

Core application requirements for Hong Kong Type 9 license

Apply for Hong Kong License No. 9，Need to meet the regulatory requirements of the Hong Kong Securities Regulatory Commission on licensed corporations and responsible persons。Generally speaking，The applicant institution must have sufficient capital strength、Clear business plan、Complete compliance system and real Hong Kong operating foundation。

in，Key requirements include：

1. The applicant organization usually needs to have two Hong Kong licensed responsible persons。
2. The licensed responsible person needs to have 3 to 5 consecutive years、Publicly available capital markets performance record。
3. Responsible personnel need to pass relevant examinations，and undergo strict qualification review。
4. The company needs to have a physical office address in Hong Kong，Reflect the true business essence。
5. Enterprises need to equip experienced management teams，Support the company’s continued compliance operations。

therefore，9No. license is more suitable for those with strong capital strength、The team is highly professional、Private equity institutions with clear business plans and the ability to invest in long-term compliance。For institutions that lack the operating foundation in Hong Kong or have insufficient responsible staffing，The overall compliance structure design should be completed before applying.。

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 Hong Kong license No. 9。According to statistics，Fushan Investment、Jingtai Lifeng Assets、Bai Fang Assets、ivy assets、Tianma Assets、Infore Capital、Qiju Assets、Yifan Assets、Value Gravity and other institutions have obtained asset management business license No. 9，Some of these institutions have obtained in the past one or two years，Some institutions completed their layout earlier。

Large private placement in progress，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。overall，Leading and professional private equity institutions are accelerating the layout of overseas asset management business through the Hong Kong licensing system。

The main paths and pros and cons of private equity overseas

Although the Hong Kong No. 9 license is an important way for private equity institutions to conduct overseas asset management business,，But it’s not the only way。Currently, common ways for private equity institutions to go overseas include Shanghai-Hong Kong Stock Connect、QII、Hong Kong license number 9、Overseas private equity manager channel and QDLP, etc.。Different paths in the business scope、cost、There are pros and cons in terms of efficiency and regulatory requirements.。

1. Shanghai-Hong Kong Stock Connect：Can be used to configure the Hong Kong market，However, the investment scope is mainly limited to the underlying stocks of Hong Kong Stock Connect.，Participating markets and varieties are relatively limited。
2. QII：You can borrow QDII quota from financial institutions such as public offerings to go 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 a lot of manpower、Material resources，The time cost is also higher。
4. Issuance through overseas private equity managers：Private equity institutions can participate in related product operations as investment consultants，But you also 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 arrangements for direct investment in products of corresponding overseas asset management companies。

QDLP mainly targets overseas hedge fund business，Hedge fund products that can raise funds domestically and invest in overseas asset management institutions。Normally，When domestic funds go overseas through QDII，Cannot invest directly in hedge funds，Mainly invest in stocks、Bonds and other assets；Shanghai’s policies on hedge funds，Allow funds to raise RMB funds domestically through QDLP quota，and directly invest in overseas products。

From a practical perspective，QDLP is more of an option for investors to allocate overseas markets.，There is limited help for some private equity institutions to directly carry out asset management business.。therefore，Private equity institutions should combine their own business goals、Customer structure、Source of funds、Product architecture and long-term operating costs，Choose a suitable sea route。

Hong Kong No. 9 License Cost and Channel Mode Selection

Due to the high cost of applying for Hong Kong No. 9 license and operating the license，Some private equity firms did not choose to apply for licenses on their own，Instead, we use the manager who already has the No. 9 license as a channel.，And participate in product issuance as an investment consultant。This has become one of the more mainstream models。

For example，OP Asset Management has 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。Recently，OP Asset Management cooperates 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。Such cooperation reflects，A Hong Kong licensed institution with license qualifications and platform resources，It is becoming an important partner for mainland private equity to develop offshore fund business.。

in a typical structure，Private equity institutions that have obtained license No. 9 can set up private equity funds in Cayman，And landed in Hong Kong and accepted the supervision of the Hong Kong Securities Regulatory Commission，Then trade through a brokerage firm。Customers can participate in subscription through Hong Kong securities firms。This model combines an offshore fund structure with、Hong Kong Regulatory Endorsement and International Transaction Facilitation。

The core reasons why private equity institutions actively apply for the No. 9 license

A large number of private equity institutions are actively applying for Hong Kong’s No. 9 license，Driven by existing customer needs，There are also factors related to the organization’s own development and changes in the market environment.。The main reasons include：

1. Expectations of RMB depreciation increase，Customer demand for overseas asset allocation rises。
2. Domestic market faces asset shortage，Higher cost of capital，Promote institutions to look for overseas investment opportunities。
3. Domestic regulations are tightening，Private equity firms want to expand into international markets and diversify their business structures。
4. The overseas investment system is more mature，More investment varieties and tools。

Periodic depreciation pressure on the RMB，This is the direct reason why many customers consider overseas configuration.。Some clients hope to allocate domestic funds to overseas markets through private placement，To avoid the risk of exchange rate depreciation and strive for better investment returns。There are also customers who already hold assets overseas，Desire to be professionally managed by a private equity firm familiar with their risk appetite and investment objectives。

at the same time，Since the stock market crash, the risk tolerance of some domestic customers has been affected，The difficulty of issuing related products increases，Private equity institutions also need to find new product directions and customer growth points。

Business opportunities brought by the enrichment of overseas investment tools

For quantitative private equity，Overseas markets are particularly attractive。The investment tools available in China are relatively limited，And in the context of restricted stock index futures，Strategy implementation and capital capacity are both subject to greater constraints。since last year，Many quantitative private equity funds are gradually participating in overseas markets，Take advantage of more abundant overseas investment varieties and derivatives，Improve strategic space。

also，Policy factors such as the opening of Shenzhen-Hong Kong Stock Connect，It also increases the need for overseas investors to allocate domestic assets.。After private equity institutions obtain corresponding qualifications by going overseas,，Easier to gain recognition from overseas investors，and further expand business scale。For large private placements，Winning overseas institutional investors has become an important direction for international development.。

Hong Kong Xintong’s practical suggestions for No. 9 license applications

Hong Kong License No. 9 is not just a document application project，It's about a business model、Personnel qualifications、Compliance system、Systematic projects on operational substance and ongoing supervision。Private equity institutions planning to apply for No. 9 license in Hong Kong，Responsible staffing should be assessed early、Hong Kong office arrangement、Equity structure、financial strength、Internal control system and product release path。

For institutions that cannot meet the full licensing conditions in the short term，Channel cooperation can be evaluated simultaneously、Investment advisory model、QII、QDLP or other cross-border configuration solutions；For institutions with long-term international development goals，then priority should be given to building a stable、Compliance、Sustainable Hong Kong licensed platform，Issuing offshore funds for the future、Lay the foundation for attracting overseas funds and expanding global asset management business。

About Hong Kong Xintong

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