What is the Hong Kong Securities and Futures Commission license? (SFC Licensing)
definition：Full name: "Securities and Futures Commission Licensee Qualifications"，It is an organization legally carried out in Hong Kong 10 Statutory licenses for regulated activities。
Common license types：
- 1 License plate (securities trading)：Provide customers with stock and stock options trading services。
- 4 Number plate (advising on securities)：Publish investment analysis report，Give buying and selling advice。
- 9 License plate (asset management)：Manage client portfolio on a discretionary basis、Managed funds or private equity。
- Emerging hot spots：Hong Kong virtual asset trading platform (VATP) ： Including under the Anti-Money Laundering Ordinance Hong Kong VASP License，As well as No. 1 (securities trading) and No. 7 (providing automated trading services)。This combination is the legal standard for operating a compliant centralized cryptocurrency exchange.，allowed to operateLicensed Cryptocurrency Exchange。
regulatory agency：
Hong Kong Securities and Futures Commission (Securities and Futures Commission, SFC)。SFC has a high degree of independence，Its regulatory focus is on the assessment of “fit and proper persons”、Capital Adequacy Ratio (FRR Rules)、and penetrating protection of investor interests。
Common license plate categories and applicable scenarios (RA 1–10)
Brokerage、Stock/Fund/Bond transaction execution、Distribution and introduction business (needs to simultaneously assess whether it touches Category 4/9)。
Futures/Derivatives Brokerage and Execution；Need to pay attention to the margin system、Risk Disclosure and Client Funding Arrangement。
investment advisory、Research and investment advice (including recommended service scope and appropriateness arrangements for professional investors)。
investment banking consultant、IPO sponsorship related advisory services、Opinions on mergers, acquisitions and reorganizations (need to clarify service boundaries and conflict of interest management)。
Trading platform/matching/system services are often involved，Need to be combined with technical architecture、Market role and counterparty arrangement judgment。
Discretionary/Fund Management、Quantitative asset management、Fiduciary account management；Need to match AUM、Strategy、Escrow and Valuation Arrangements。
Compliance advice：The same business model may involve multiple types of regulated activities at the same time。For example, the integrated structure of “brokerage + investment advisory + asset management”，Need for staffing、internal separation wall、conflict of interest、Systematic design of research independence and fee structure。
Access key：RO/MIC、Fit & Proper and corporate governance
The SFC’s core requirements for licensed corporations focus on “competence and fit and proper persons” (Fit & Proper) and verifiable governance and control capabilities。The application stage usually requires the completion of the following key elements:：
- Responsible Officer（RO）：Each regulated activity usually requires at least 2 ROs (the actual arrangement is subject to business and SFC requirements)。Industry experience required、Competence、Manage requirements such as engagement and time investment。
- Management-In-Charge（MIC）：Identify key functional responsibilities (e.g. overall management、Compliance、risk、AML/CTF、information technology、operations, etc.)，and form job responsibilities、Reporting lines and authorization matrix。
- corporate governance：Board of Directors and Management Meeting Mechanism、three lines of defense、Compliance and risk independence、Reporting and recording major matters。
- Conflicts of Interest and the Wall：Information isolation between research/trading/asset management/sales、Personal account transactions、Gifts and entertainment、Related party transactions and soft dollar policies, etc.。
Compliance and Internal Control Delivery List (AML)、appropriateness、client assets)
Licensing application and subsequent ongoing compliance，Essentially, the company is required to have operational、provable、Auditable systems and processes。We usually press "Institutional Documents" + Process SOP + System and Record” three-tier delivery：
- AML/CTF：Customer Risk Assessment (CRA)、KYC/EDD、Beneficiary identification、Sanctions and PEP Screening、Transaction monitoring、Suspicious Transaction Reporting (STR) Process、Continuous due diligence and re-evaluation mechanism。
- Suitability and Sales Compliance：Customer Classification (PI/Non-PI)、Risk tolerance assessment、Product due diligence、Sales recording/recording、Risk disclosure、Cooling-off Period and Complaint Handling。
- Client assets and funding arrangements：Customer money segregation、Escrow/Settlement Arrangements、Reconciliation mechanism、Authorization、Fund instruction control and exception handling。
- Outsourcing and technology risks：cloud service、key suppliers、Penetration testing and vulnerability management、Permissions and logs、BCP/DR、Data life cycle and access control。
If it involves financial technology system construction and data governance，Can connect with usData security assessmentandPersonal information protectionSpecial services，Establish a chain of control evidence that can be accepted by regulators and banks for due diligence。
Not only provides templates，More output is "record list + trace elements"，Meet SFC/audit/bank due diligence evidence requirements。
Will KYC、appropriateness、Post-trade monitoring、Complaints and incident reporting solidified into SOP，And supporting forms and approval paths。
Can be combined with KYC and transaction monitoring systems to achieve screening、early warning、Work order and audit traceability，Reduce labor compliance costs。
Unified external (supervision/bank/partner) and internal (board of directors/front office/operation) caliber，Reduce repeated inquiries。
Application process and timeline (from assessment to licensing)
Sort out business links、Contract and charging model，Determine the RA categories involved and the possibility of exemption，Develop an application roadmap。
Determine the licensed corporation、Equity and capital arrangements；RO/MIC/Compliance and MLRO candidate evaluation and resume evidence enhancement。
Complete AML、appropriateness、conflict of interest、Outsourcing and IT Control、Core policies and SOPs such as customer assets。
Prepare application form、Additional information、Organizational structure、financial forecast、Description of internal controls、Documents proving key personnel, etc.。
Unified question and answer caliber、Supplementary evidence and process demonstration，Adjust organizational arrangements and control design when necessary。
Conduct compliance training、First round of internal control review、Regulatory reporting and continuous monitoring；Make changes and additions according to business expansion。
Cost and Budget (Reference Range and Composition)
Different RA categories、Equity structure、System construction level and outsourcing arrangements，Will significantly affect the total cost。The following areCommon cost structure reference for compliance implementation in Hong Kong(Including government fees、Corporate Basic Expenses and Compliance/Documentation Services)。If your business involves non-SFC activities such as fund exchange/remittance，It may also be necessary to simultaneously evaluate the suitability and cost of other regulatory licenses。
| Expense Category | project | Reference amount (HKD) | illustrate |
|---|---|---|---|
| government fees | Application fee | 3,310 | Pay according to applicable license/application matters (example reference) |
| government fees | Fit & Proper review fee | 860/people | Key personnel/persons in charge, etc. (in terms of number of people) |
| Basic expenses | Company registration and establishment | 8,000–15,000 | Including company registration、Business registration and other basic establishment cost ranges |
| Basic expenses | Office/Venue | 20,000–80,000/year | Depending on the location、The area depends on the shared office plan |
| service fee | License application services | 60,000–150,000 | Including scheme design、Material preparation、Submission and inquiry support (range) |
| service fee | AML/Compliance Documentation System | 20,000–80,000 | policy、SOP、Form and record list (range) |
| total | standard interval | 150,000–400,000 | Actual business scope、Staffing and system construction shall prevail |
suggestion：Consider bank account opening due diligence at the same time during the budget assessment stage、System procurement (KYC/transaction monitoring/log audit)、Long-term costs such as auditing and ongoing compliance manpower，Avoid "distortion of operating costs after obtaining the license"。
FAQ：The most common compliance issues faced by businesses
Can，However, it is necessary to prove that the Hong Kong licensed corporation has real management and control capabilities (RO/MIC performance、Physical office and operational arrangements、Key decisions leave traces)。Cross-border division of labor and outsourcing require clear boundaries of responsibilities、Regulatory visibility and auditable evidence。
Not necessarily。Whether a license is required depends on whether it constitutes a regulated activity under the SFO，rather than customer type。PI-related arrangements often impact suitability and sales process requirements，However, it does not automatically exempt you from licensing obligations.。
Commonly concentrated in：Does RO meet the requirements of experience and actual management participation?；Are MIC responsibilities and reporting lines clear?；AML and whether the appropriateness process is "operational"；Are outsourcing and IT controls adequate?；Can conflicts of interest and fee disclosures be verified?。
The triggering factors for “operating in Hong Kong” (personnel activities in Hong Kong) need to be carefully assessed、marketing solicitation、Signing and transaction execution location、Customer capital flow and service essence)。It is recommended to complete a cross-border compliance assessment and review of marketing materials before any promotion to Hong Kong。
Continuous compliance and monitoring need to be maintained：Regular compliance reporting、AML review and training、Client asset reconciliation、Complaints and Incident Management、outsourcing review、IT security assessment、Supervision declaration and personnel change filing, etc.。
High-frequency combination of Hong Kong SFC license and global financial license
| Business goals/scenarios | Recommended license plate combinations | Core logic and value |
|---|---|---|
| Chinese-funded private equity/family offices going overseas | Hong Kong SFC No. 9 + 4Number | The most classic： 9Number plate management money (fund/asset management)，4Number plate gives advice (investment advisory)。It is the standard for mainland private equity funds to manage overseas assets in compliance with regulations.。 |
| Compliant Crypto Exchange (VATP) | Hong Kong SFC No. 1 + 7Number | Web3 top configuration： 1Number plate brokerage (buying and selling)，7Number plate matching (automated trading system)。Currently the standard configuration of Hong Kong licensed exchanges (such as HashKey)。 |
| All-in-one digital bank/wallet | British AEMI + Singapore MPI | global payment： British AEMI handles European and global electronic currency issuance；Singapore MPI handles Southeast Asia’s acquiring and digital token (DPT) business。 |
| Cross-border currency exchange and U-merchant transfer | Hong Kong MSO + USA MSB | High cost performance： MSO solves local and foreign currency exchange in Hong Kong；US MSB provides federal level anti-money laundering endorsement，Convenient access to global compliance payment channels。 |
| Brokerage business | Hong Kong SFC No. 1 + 2Number + 4Number | Fully licensed brokerage： 1No. to buy stocks，2Buy futures，4No. research report。The basics of Chinese securities firms’ development in Hong Kong。 |
| Overseas collection and payment platform | Canadian MSB + Australia AUSTRAC | Low cost to start： Both of them play cards quickly、low cost，Suitable for start-up teams to legally carry out basic remittance and currency trading businesses around the world。 |