Dealing in securities
Commonly relevant to stockbroking, placing and underwriting, securities execution, and fund or securities distribution.
BrokerageFund distribution
Hong Kong Regulatory Advisory
Hong Kong SFC Licence Application
Build a regulated securities, futures, leveraged foreign exchange, corporate finance or asset management business in Hong Kong with a licensing strategy designed around what your firm will actually do.
Independent regulatory consulting. FinPro Consulting is not the SFC and cannot guarantee approval.
13regulated activity categories in Schedule 5
2 ROsnormally required for each regulated activity
15 weeksSFC’s normal corporate processing estimate*
Ongoingcapital, reporting, conduct and training duties
*For a new industry participant after a complete application is taken up. Complex or incomplete cases can take longer.
Start with the business model
A licence number is not a business model
Hong Kong licensing is activity-based. The correct application depends on the instruments, client journey, execution model, discretion, custody, technology and revenue streams—not simply the label attached to the company.
A firm distributing a fund may need Type 1; a manager with discretionary investment authority will generally look to Type 9; an investment adviser without discretion may need Type 4; and a company operating an automated matching facility may enter Type 7 territory. Small contractual or operational differences can change the analysis.
Active marketing matters. A corporation outside Hong Kong may still trigger licensing concerns where it actively markets to the Hong Kong public services that would constitute a regulated activity if provided in Hong Kong. Website language, campaigns, referral arrangements and client onboarding should be reviewed together.
Scope mapping
Translate products, client flows and fees into the relevant regulated activities and likely licence conditions.
Readiness design
Align ownership, ROs, MICs, capital, premises, banking, outsourcing and controls before filing.
Evidence-led filing
Prepare a coherent business plan and supporting materials that explain how the proposed operation will work in practice.
Regulated activities
Hong Kong licence types explained
The summaries below are practical signposts, not substitutes for the statutory definitions and exclusions in Schedule 5 to the Securities and Futures Ordinance.
Dealing in futures contracts
Covers dealing or arranging deals in futures contracts, subject to statutory exclusions and the exact execution model.
Futures brokerExchange derivativesLeveraged foreign exchange trading
Relevant to leveraged FX dealing and related arrangements. It carries materially higher application fees and financial resource thresholds than most other RAs.
Leveraged FXHigh capitalAdvising on securities
Commonly used for securities research and investment advice where the adviser does not exercise discretionary management authority.
ResearchInvestment adviceAdvising on futures contracts
Applies to advice or analysis concerning futures contracts, subject to the statutory definition and available exclusions.
Futures adviceResearchAdvising on corporate finance
Relevant to listing, takeover, merger, restructuring and other corporate finance advice. Sponsor and Takeovers Code work require additional eligibility and competence.
IPO advisoryM&AProviding automated trading services
Potentially applies to facilities through which offers to buy or sell are regularly made or accepted in a way that results in binding transactions.
Trading platformMatching systemSecurities margin financing
Financing acquisitions or continued holding of listed securities. A Type 1 dealer financing its own securities clients may fall under a specific exemption but higher capital can apply.
Margin loansListed securitiesAsset management
Usually relevant where a manager exercises discretionary investment authority over securities or futures portfolios, funds or mandates.
Fund managerDiscretionary mandateProviding credit rating services
Preparing credit ratings intended for public dissemination or distribution by subscription. Internal counterparty assessments are treated differently.
Credit ratingsPublicationOTC derivatives dealing or advice
Defined in the legislation, but the licensing regime is not yet in operation for licensing purposes as at this page’s review date.
OTC derivativesClient clearing for OTC derivatives
Also defined in Schedule 5, but not yet in operation for licensing purposes as at this page’s review date.
Client clearingDepositary services for relevant CISs
Applies to depositaries—trustees or custodians—of SFC-authorised collective investment schemes within the statutory scope.
Public fundsTrustee / custodianImportant: Types 11 and 12 should not be promoted as currently obtainable licences. Type 13 has been in operation since 2 October 2024. The regulatory perimeter may change, so scope should be reconfirmed before filing or launching a new product.
Common combinations
Which licence mix fits your plan?
Many firms need more than one regulated activity. The combination follows the actual service chain, not a standard package.
4 + 9
Investment adviser and asset manager
Type 4 for a distinct securities advisory service; Type 9 for discretionary portfolio or fund management.
Often structured with a “no client assets” condition, subject to the proposed model.1 + 4 + 9
Distribution, advice and management
Potentially relevant where a group distributes funds or securities, provides distinct advice and manages assets.
Incidental exemptions may apply in limited cases, but should not be assumed.1 + 2
Securities and futures brokerage
For firms executing or arranging transactions across securities and futures markets.
Exchange participation, clearing, client assets, insurance and system controls add separate workstreams.1 + 6
Capital markets and corporate finance
Type 1 may cover placing or underwriting; Type 6 covers corporate finance advice.
Sponsor, compliance adviser and Takeovers Code activities require additional approvals or competence.3
Leveraged FX business
Type 3 is a specialist licence with a different fee and prudential profile.
A full dealer is generally subject to HK$30m paid-up capital and HK$15m minimum liquid capital; an approved introducing agent has lower thresholds.1 + 7 + VA
Virtual asset trading platform
A Hong Kong VATP normally involves Type 1 and Type 7 under the SFO plus a separate virtual asset service provider licence under the AMLO.
The platform-specific regime is substantially more extensive than an ordinary Type 1 or Type 7 application.Core approval criteria
What the SFC expects to see
A credible application connects people, capital, governance, systems and controls to a commercially coherent business plan. Paper policies alone are not enough.
1. Eligible corporate applicant
A Hong Kong-incorporated company or an overseas company registered with the Hong Kong Companies Registry.
2. Fit and proper ownership
The applicant, substantial shareholders, directors, officers and relevant personnel are assessed for financial standing, competence, reputation, reliability and integrity.
3. Responsible Officers
At least two ROs are normally required for each RA; at least one must be an executive director, and at least one RO must be available at all times to supervise the business.
4. Competent team
ROs and licensed representatives must satisfy relevant experience, qualification, local regulatory examination and competence requirements, subject to available exemptions.
5. MIC governance
The board-approved management structure must identify Managers-In-Charge for core functions, including overall management oversight, key business line, risk, compliance, finance, operations, IT and AML/CFT.
6. Financial resources
Paid-up and liquid capital must meet the applicable floor at all times. The applicant should also demonstrate funding for at least the first six months of projected operating expenses.
7. Controls and conduct
Policies must address onboarding, suitability, conflicts, dealing, custody, complaints, AML/CFT, sanctions, outsourcing, cyber risk, incident handling, record keeping and business continuity as applicable.
8. Premises and records
The principal place of business and any premises used for keeping records may require approval. External electronic data storage arrangements must preserve SFC access and regulatory record integrity.
9. Operational readiness
Bank accounts, auditors, service providers, technology, client documentation, reporting calendars and staffing should be ready to support the proposed operating model.
Capital planning
Minimum financial resources at a glance
The figures below are statutory minimums in Hong Kong dollars. Actual funding should be driven by the firm’s risk profile, forecast expenses and required financial resource buffers.
| Regulated activity / model | Minimum paid-up capital | Minimum liquid capital |
|---|---|---|
| Type 1 — approved introducing agent or trader | Not applicable | HK$500,000 |
| Type 1 — margin financing / private OFC custodian | HK$10,000,000 | HK$3,000,000 |
| Type 1 — other | HK$5,000,000 | HK$3,000,000 |
| Type 2 — approved introducing agent, trader or futures non-clearing dealer | Not applicable | HK$500,000 |
| Type 2 — other | HK$5,000,000 | HK$3,000,000 |
| Type 3 — approved introducing agent | HK$5,000,000 | HK$3,000,000 |
| Type 3 — other | HK$30,000,000 | HK$15,000,000 |
| Types 4, 5, 9 or 10 — no client assets condition | Not applicable | HK$100,000 |
| Types 4, 5, 9 or 10 — otherwise | HK$5,000,000 | HK$3,000,000 |
| Type 6 — sponsor | HK$10,000,000 | HK$100,000 without client assets; HK$3,000,000 with client assets |
| Type 6 — non-sponsor | Not applicable without client assets; HK$5,000,000 with client assets | HK$100,000 without client assets; HK$3,000,000 with client assets |
| Type 7 | HK$5,000,000 | HK$3,000,000 |
| Type 8 | HK$10,000,000 | HK$3,000,000 |
| Type 13 | HK$10,000,000 | HK$3,000,000 |
For multiple RAs: the minimum paid-up share capital and liquid capital are generally the highest applicable amounts among the regulated activities—not the sum of every row. The Financial Resources Rules also contain ongoing calculations and adjustments, so the headline minimum is not a safe operating target.
Application journey
From concept to licensed operation
A well-run application front-loads decisions. Filing first and resolving ownership, personnel or operating-model issues later commonly causes delay.
Regulatory perimeter
Map products, instruments, clients, jurisdictions, channels, custody, discretion and remuneration.
Gap assessment
Review ownership, ROs, MICs, staffing, capital, premises, banking, technology and providers.
Structure and people
Confirm applicant entity, controllers, board, proposed ROs, LRs and core function owners.
Documentation
Prepare the business plan, financial projections, organisation chart, manuals and supporting evidence.
WINGS filing
Submit coordinated corporate, individual and RO applications with applicable fees.
SFC assessment
Manage questions, clarifications, interviews, background checks and any required updates.
Pre-approval readiness
Complete capital injection, bank details, premises, systems, staffing and outstanding conditions.
Launch and maintain
Operate within licence conditions and implement the reporting, audit, training and notification calendar.
Indicative SFC processing time
The SFC states that a new licensed corporation application normally takes approximately 15 weeks to process. This begins from a complete, taken-up application and is not a guaranteed completion date.
What commonly extends the timeline
Incomplete evidence, changing scope or shareholders, RO or MIC changes, employment visas, capital injection, bank opening, third-party regulator checks, complex products and slow responses.
Application pack
Documents should tell one consistent story
The filing is more than an application form. Information across the corporate application, individual applications, business plan, financial projections and policy suite must reconcile.
- Group and ownership structure, source of capital and controller information
- Detailed business plan, client and product profile, revenue model and workflow
- Three-year financial projections and first six months’ operating expense analysis
- Board and MIC-approved governance and organisation structure
- RO/LR qualifications, regulatory examinations and relevant experience evidence
- Operational, compliance, AML/CFT, risk, cybersecurity and continuity manuals
- Outsourcing, brokerage, custody, banking, technology and other provider arrangements
- Client agreements, disclosures, suitability and complaint-handling documents
Common application weaknesses
- Generic business plans that do not explain the actual client and transaction flow.
- ROs proposed “in name only” without authority, time commitment or real supervisory duties.
- Revenue projections inconsistent with the stated customer base or licence condition.
- Outsourced functions with no clear oversight, access, audit or exit arrangements.
- Policies copied from another firm and not calibrated to products, systems or staffing.
- Ambiguous custody, client-money or order-routing arrangements.
- Marketing materials that imply services wider than the proposed licensed scope.
- Underestimating bank onboarding, premises approval and technology implementation lead times.
After approval
The licence is the start of the compliance lifecycle
Licensed corporations and people must remain fit and proper, maintain resources, comply with conduct standards and keep the SFC informed of specified changes.
Financial reporting
Financial resources returns are generally monthly. Certain firms licensed only for Types 4, 5, 6, 9 and/or 10 with a no-client-assets condition may file semi-annually.
Audit and annual filings
Audited accounts are generally due within four months after financial year-end; annual returns and fees are generally due within one month after each licence anniversary.
Continuous training
Licensed individuals generally complete 10 CPT hours each calendar year; ROs have two additional hours on regulatory compliance, with extra topic rules for certain work.
Notifications
Many changes—directors, address, shareholding, MICs, bank accounts, business plan or service scope—carry advance or seven-business-day notification requirements.
AML/CFT and conduct
Customer due diligence, ongoing monitoring, record keeping, sanctions controls, suitability, conflicts and fair dealing must operate in practice and be evidenced.
Operational resilience
Cybersecurity, vendor oversight, incident response, business continuity, complaint handling and regulatory record access require ongoing testing and governance.
Special perimeter
Virtual assets require separate analysis
“Type 1 + Type 7” is not a shorthand licence for every virtual asset business. A centralised virtual asset trading platform operating in Hong Kong or actively marketing to Hong Kong investors normally needs both relevant licences under the Securities and Futures Ordinance and a virtual asset service provider licence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
Virtual asset dealing, distribution, advisory, asset management, tokenised securities, custody, staking and platform operation may each engage different requirements, licence conditions or product restrictions. New statutory regimes for virtual asset dealing and custody have also been under development, so a current perimeter review is essential before launch.
Do not confuse these concepts
- An ordinary Type 1 licence is not automatically a VATP licence.
- An SFO licence and an AMLO VASP licence arise under different statutory regimes.
- Being an applicant is not the same as being licensed.
- A licensed platform may only offer products and services within its approved scope and conditions.
- Security tokens and non-security virtual assets may require different legal analysis.
FinPro support
One coordinated licensing workstream
We help founders, financial groups and overseas institutions turn a proposed Hong Kong operation into an application-ready structure.
Licence strategy
Regulatory perimeter, entity and RA selection, licence-condition planning and phased launch strategy.
Personnel planning
RO and MIC structure, competence mapping, examination planning and role documentation.
Application drafting
Business plan, workflows, financial model, organisation chart and application coordination.
Policies and controls
Risk-based compliance, AML/CFT, conduct, outsourcing, technology and continuity frameworks.
Operational setup
Coordination with Hong Kong legal, audit, tax, corporate, banking, technology and premises providers as required.
Regulatory engagement
Question tracking, response preparation, evidence management and pre-approval readiness support.
Our approach: first confirm the regulated perimeter, then build the operating model and evidence around it. Legal opinions, audit work, tax advice, recruitment and other reserved professional services are provided by appropriately qualified independent professionals where required.
Frequently asked questions
Questions clients ask before applying
Can a non-Hong Kong shareholder own an SFC-licensed corporation?
There is no general requirement that all shareholders be Hong Kong residents. However, substantial shareholders, controllers, directors and other relevant persons are assessed as fit and proper. Complex or opaque ownership structures, regulatory history, source of capital and cross-border supervision can require additional evidence.
Do we need two Responsible Officers for every licence type?
A licensed corporation should appoint at least two ROs to directly supervise each regulated activity, with at least one an executive director and at least one available at all times. The same qualified person may cover more than one RA where fit and proper and where there is no role conflict. Exchange participants are generally expected to have at least two ROs locally available at all times for brokerage supervision.
Can we hire an RO only to satisfy the application?
No. The SFC expressly rejects “RO in name only” arrangements. An RO must have sufficient authority, genuine duties, appropriate time commitment and practical involvement in supervising the regulated business.
Does Type 9 allow us to distribute our fund?
Type 9 generally covers discretionary asset management. Marketing or distributing a fund may constitute Type 1 dealing in securities. A limited incidental exemption may apply to certain activities carried out solely for the asset management business, but distribution should be separately analysed.
Can an advisory or asset management firm avoid paid-up capital?
For Types 4, 5, 9 or 10, a corporation subject to a condition that it will not hold client assets may have no prescribed minimum paid-up share capital and a HK$100,000 minimum liquid capital requirement. It must still have enough financial resources to operate and meet the Financial Resources Rules at all times.
Is 15 weeks the full project timeline?
Not usually. Fifteen weeks is the SFC’s normal processing estimate for a new licensed corporation application. Preparation, recruitment, exams, visas, bank onboarding, capital injection, premises and system implementation occur before or alongside regulatory review. Complex or changing applications may take materially longer.
Can we market in Hong Kong while the application is pending?
Submitting an application does not confer licensed status. Conducting or actively marketing regulated services before approval can create regulatory risk. Pre-launch communications and client acquisition plans should be carefully controlled and legally reviewed.
Can FinPro guarantee the licence will be approved?
No adviser can guarantee an SFC decision. Approval is made by the SFC based on the law, the application and its assessment of fitness and properness, competence, resources and controls. FinPro helps improve readiness, coherence and execution, but does not exercise regulatory authority.
Plan the licence before you build the cost base
Share your proposed products, clients, ownership, operating model and target launch date. We will help identify the likely regulated activities, readiness gaps and practical next steps.
Regulatory notice: This page is general information only and does not constitute Hong Kong legal advice, tax advice, investment advice or an assurance of licence approval. Statutory definitions, exclusions, transitional provisions, SFC policies and individual licence conditions must be considered in the context of each business. Information reviewed against SFC materials available as at 7 August 2026. FinPro Consulting is an independent consultancy and is not affiliated with or endorsed by the Securities and Futures Commission.
Primary references: Do you need a licence? · Types and approval criteria · Application procedures · Ongoing obligations · Licensing Handbook.
