Securities & Futures Commission of Hong Kong

Types of intermediary and licensed individual

Corporations

Full licensed corporations

A corporation (that is not an authorized financial institution) which is granted a licence to carry on one or more regulated activities under section 116 of the SFO.

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General fit and proper requirement

The SFC is obliged to refuse to grant a licence or registration if the applicant fails to satisfy the SFC that it is fit and proper. Pursuant to section 129 of the SFO, in considering whether a person is fit and proper for the purposes of licensing or registration, the SFC shall, in addition to any other matter that the SFC may consider relevant, have regard to the following:

  • financial status or solvency,
  • educational or other qualifications or experience having regard to the nature of the functions to be performed,
  • ability to carry on the regulated activity concerned competently, honestly and fairly, and
  • reputation, character, reliability and financial integrity

of the applicant and other relevant persons as appropriate.

The above criteria serve as the fundamental basis when the SFC considers each licence or registration application. For further elaboration of these attributes, you may wish to refer to the “Fit and Proper Guidelines” and “Guidelines on Competence”.

We set out below the specific criteria that different types of applicant normally need to satisfy to get a licence or registration.

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Specific approval criteria

Incorporation

You must be a company incorporated in Hong Kong or an overseas company registered with the Companies Registry of Hong Kong.

Competence

You have to satisfy the SFC that you have proper business structure, good internal control systems and qualified personnel to ensure the proper management of risks that you will encounter in carrying on your proposed business as detailed in your business plan. Please refer to the following publications of the SFC for more information:

Responsible officers

  • You should appoint not less than two responsible officers to directly supervise the conduct of each regulated activity you apply for.
     
  • For each regulated activity you apply for, you should have at least one responsible officer available at all times to supervise the business. The same individual may be appointed to be a responsible officer for more than one regulated activity provided s/he is fit and proper to be so appointed and there is no conflict in the roles assumed.

  • At least one of your proposed responsible officers must be an executive director as defined under the SFO.

  • The SFC generally expects that the Managers-In-Charge of the Overall Management Oversight function and the Key Business Line function described in the section of “Senior Management” of this page should seek the SFC’s approval as responsible officers in respect of the regulated activities they oversee. For details, please refer to the “Circular to Licensed Corporations Regarding Measures for Augmenting the Accountability of Senior Management” and FAQ (Measures for augmenting senior management accountability in licensed corporations).

  • All your executive directors must seek the SFC’s approval as responsible officers accredited to your corporation.

  • All applications for approval as responsible officers should be lodged with the SFC for consideration together with your licence application.

Senior Management

  • The senior management of your corporation should bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures by you.

    The SFC is of the view that senior management of a licensed corporation includes, among others:
  1. directors of the corporation,
  2. responsible officers of the corporation, and
  3. individuals whom we call the Managers-In-Charge of Core Functions (MICs)
  • These three categories are not mutually exclusive. For instance, an individual can simultaneously be a director, responsible officer and MIC of a licensed corporation.

  • When applying for a licence under section 116(1) of the SFO, you are required to provide information regarding your MICs and your organisational chart.

  • The management structure of a licensed corporation (including its appointment of MICs) should be approved by the Board of the corporation. Furthermore, the Board should ensure that each of the corporation’s MICs has acknowledged her/his appointment as MIC and the particular Core Function(s) for which s/he is principally responsible.

  • After being licensed, you are required to notify the SFC of any changes in your appointment of MICs or any changes in certain particulars of your MICs within seven business days of the changes. In some situations, you are also required to submit an updated organisational chart in your notification of that change.

  • For details of the requirements, please refer to the “Circular to Licensed Corporations Regarding Measures for Augmenting the Accountability of Senior Management” and FAQ (Measures for augmenting senior management accountability in licensed corporations).

Substantial shareholders, officers and other related persons to be fit and proper

Your substantial shareholders, officers and any other person who is or is to be employed by, or associated with, you for the purposes of the regulated activity for which the application is made shall be fit and proper. Please refer to section 129 of the SFO for details.

Financial resources

Depending on the type(s) of regulated activity that you apply for, you have to maintain at all times paid-up share capital and liquid capital not less than the specified amounts according to the Securities and Futures (Financial Resources) Rules. If you apply for more than one type of regulated activity, the minimum paid-up share capital and liquid capital that you should maintain shall be the highest amount required amongst those regulated activities you apply for.

The following table summarizes the minimum paid-up capital and liquid capital that a licensed corporation is required to maintain for each type of regulated activity.

Minimum paid-up share capital and liquid capital requirements

Regulated activity

Minimum paid-up share capital

Minimum liquid capital

Type 1 –

(a) in the case where the corporation is an approved introducing agent or a trader

(b) in the case where the corporation provides securities margin financing

(c) in any other case


Not applicable


$10,000,000
 

$5,000,000 

 

$500,000

 

$3,000,000
 

$3,000,000 

Type 2 –

(a) in the case where the corporation is an approved introducing agent, a trader or a futures non-clearing dealer

(b) in any other case

 

Not applicable

 

$5,000,000

 

$500,000

 

$3,000,000

Type 3 –

(a) in the case where the corporation is an approved introducing agent

(b) in any other case

 

$5,000,000
 

$30,000,000

 

$3,000,000
 

$15,000,000

Type 4 –

(a) in the case where in relation to Type 4 regulated activity, the corporation is subject to the licensing condition that it shall not hold client assets

(b) in any other case

 

Not applicable

 

 

$5,000,000

 

$100,000

 

 

$3,000,000

Type 5 –

(a) in the case where in relation to Type 5 regulated activity, the corporation is subject to the licensing condition that it shall not hold client assets

(b) in any other case


Not applicable

 

 

$5,000,000 

 

 $100,000

 

 

$3,000,000

Type 6 –

(a) in the case where the corporation acts as a sponsor:

- hold client assets

- not hold client assets

 (b) in the case where the corporation does not act as a sponsor:

- hold client assets

- not hold client assets

 

$10,000,000

$10,000,000

 

  

$5,000,000

Not applicable

 

$3,000,000

$100,000

 

  

$3,000,000

$100,000

Type 7

$5,000,000

$3,000,000

Type 8

$10,000,000

$3,000,000

Type 9 –

(a) in the case where in relation to Type 9 regulated activity, the corporation is subject to the licensing condition that it shall not hold client assets

(b) in any other case

 

Not applicable



$5,000,000

 

$100,000

 

 

$3,000,000

Type 10 –

(a) in the case where in relation to Type 10 regulated activity, the corporation is subject to the licensing condition that it shall not hold client assets

(b) in any other case

 

Not applicable



$5,000,000

 

$100,000



$3,000,000

 

Please refer to the Securities and Futures (Financial Resources) Rules for more information on financial resources requirements, e.g. the computation of liquid capital.


Insurance

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Further guidance

Sponsors

To be eligible to act as a sponsor or a compliance adviser, you are required to be licensed for Type 6 regulated activity that (i) can meet the eligibility criteria set out in the Sponsor Guidelines (Appendix I to the “Fit and Proper Guidelines”) and (ii) remain fit and proper as licensees. Your Management and you shall be responsible for ensuring that the firm satisfies all specific and on-going eligibility criteria of the Sponsor Guidelines and paragraph 17 of the Code of Conduct. (The Sponsor Guidelines and the Code of Conduct can be downloaded from the SFC website (http://www.sfc.hk) under the “Rule Book” section.)

See also FAQ (Sponsor regime)

Real estate investment trusts (REITs) managers

A REITs management company is required to be licensed for Type 9 regulated activity (asset management). Whether it needs to be licensed for other type(s) of regulated activity depends on its mode of operation. For instance, if the management company will also be involved in the listing application of the scheme itself (without appointing a listing agent), the company will need to be licensed for Type 6 regulated activity (advising on corporate finance). If the company will also be involved in distributing REITs or other securities, it will need to be licensed for Type 1 regulated activity (dealing in securities) in addition to Type 9.

See also FAQ (Companies entering the industry for the purposes of managing real estate investment trusts (REITs))

Temporary licensed corporations

A corporation (that is not an authorized financial institution) which is granted a temporary licence to carry on, for a period not exceeding 3 months, one or more regulated activities (other than Type 3 (leveraged foreign exchange trading), Type 7 (providing automated trading services), Type 8 (securities margin financing) and Type 9 (asset management)) under section 117 of the SFO.

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General fit and proper requirement

The SFC is obliged to refuse to grant a licence or registration if the applicant fails to satisfy the SFC that it is fit and proper. Pursuant to section 129 of the SFO, in considering whether a person is fit and proper for the purposes of licensing or registration, the SFC shall, in addition to any other matter that the SFC may consider relevant, have regard to the following:

  • financial status or solvency,
  • educational or other qualifications or experience having regard to the nature of the functions to be performed,
  • ability to carry on the regulated activity concerned competently, honestly and fairly, and
  • reputation, character, reliability and financial integrity

of the applicant and other relevant persons as appropriate.

The above criteria serve as the fundamental basis when the SFC considers each licence or registration application. For further elaboration of these attributes, you may wish to refer to the “Fit and Proper Guidelines” and “Guidelines on Competence”.

We set out below the specific criteria that different types of applicant normally need to satisfy to get a licence or registration.

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Specific approval criteria

Similar role overseas

You should be carrying on a business principally outside Hong Kong in an activity which, if carried on in Hong Kong, would constitute a regulated activity. You seek to be licensed for a limited period of time (as mentioned below) for the regulated activity solely for carrying on in Hong Kong such business in the activity. In addition, you are authorized by a relevant regulatory organization in your home jurisdiction to carry on such business in that place.

Restriction on types of regulated activity

A temporary licence holder may carry on one or more of the following regulated activities only:

  • Type 1 (dealing in securities)
  • Type 2 (dealing in futures contracts)
  • Type 4 (advising on securities)
  • Type 5 (advising on futures contracts)
  • Type 6 (advising on corporate finance)
  • Type 10 (providing credit rating services)

Cannot hold client assets

You cannot hold any client assets in carrying on the regulated activity.

Licensed period

  • Your temporary licence, if granted, will be for a duration of not more than 3 months at any one time.
  • You will not be granted temporary licences for more than 6 months in total within any period of 24 months.

Supervision of business

You are required to nominate at least one individual for approval by the SFC for the purposes of section 117(5)(a) of the SFO. That individual shall be available at all times to supervise the business of regulated activity.

Substantial shareholders, officers and other related parties to be fit and proper

Your substantial shareholders, officers and any other person who is or is to be employed by, or associated with, you for the purposes of the regulated activity for which the application is made shall be fit and proper. Please refer to section 129 of the SFO for details.

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Further guidance

Sponsors

To be eligible to act as a sponsor or a compliance adviser, you are required to be licensed for Type 6 regulated activity that (i) can meet the eligibility criteria set out in the Sponsor Guidelines (Appendix I to the “Fit and Proper Guidelines”) and (ii) remain fit and proper as licensees. Your Management and you shall be responsible for ensuring that the firm satisfies all specific and on-going eligibility criteria of the Sponsor Guidelines and paragraph 17 of the Code of Conduct. (The Sponsor Guidelines and the Code of Conduct can be downloaded from the SFC website (http://www.sfc.hk) under the “Rule Book” section.)

See also FAQ (Sponsor regime)

Real estate investment trusts (REITs) managers

A REITs management company is required to be licensed for Type 9 regulated activity (asset management). Whether it needs to be licensed for other type(s) of regulated activity depends on its mode of operation. For instance, if the management company will also be involved in the listing application of the scheme itself (without appointing a listing agent), the company will need to be licensed for Type 6 regulated activity (advising on corporate finance). If the company will also be involved in distributing REITs or other securities, it will need to be licensed for Type 1 regulated activity (dealing in securities) in addition to Type 9.

See also FAQ (Companies entering the industry for the purposes of managing real estate investment trusts (REITs))

Registered institutions

An authorized financial institution which is registered to carry on one or more than one regulated activity, other than Type 3 (leveraged foreign exchange trading) and Type 8 (securities margin financing) regulated activities, under section 119 of the SFO.

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Specific approval criteria 

Authorized institution

You must be an authorized financial institution.  It is desirable that you notify the HKMA before submitting an application for registration to the SFC. 

Executive officers

  • You should appoint not less than two executive officers responsible for directly supervising the conduct of each regulated activity you apply for.
  • For each regulated activity, you should have at least one executive officer available at all times to supervise the business.  The same individual may be appointed to be an executive officer for more than one regulated activity provided that s/he is fit and proper to be so appointed and there is no conflict in the roles assumed.
  • An executive officer is a person who has obtained the consent of the HKMA to act in such capacity under the Banking Ordinance.  The HKMA is obliged to refuse to give that consent unless it is satisfied that the individual is a fit and proper person and has sufficient authority to be an executive officer of the registered institution concerned.
  • Executive officers are expected to meet the same competence requirements as responsible officers of licensed corporations described in Responsible officers.

Relevant individuals

  • Individuals engaged to carry on regulated activity on your behalf are regarded as relevant individuals.  They are not required to be registered or licensed with the SFC, but their names and certain particulars have to be entered in the register maintained by the HKMA.
  • It is a statutory condition of registration for every registered institution that its relevant individuals are fit and proper.  In relation to competence requirements, executive officers are expected to meet the same requirements as responsible officers of licensed corporations while other relevant individuals are expected to meet the same competence requirements as licensed representatives.
 

Substantial shareholders, etc. to be fit and proper

Your substantial shareholders, directors, chief executive, managers (as defined in section 2(1) of the Banking Ordinance), executive officers and any other person who will be acting for or on behalf of you in relation to the regulated activity for which the application is made shall be fit and proper.  Please refer to section 129 of the SFO for details.

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Further guidance

You should maintain sufficient records (with supporting documents, where applicable) on how the competence requirements of relevant individuals are satisfied and make these records available for inspection upon request from the HKMA.

You should ensure that a relevant individual does not purport to rely on any exemption from the recognized industry qualification and local regulatory framework requirements unless this is in line with the criteria set out in Appendices D and E of the “Guidelines on Competence”.

The HKMA may require an applicant to provide an Independent Assurance Report (IAR) to support its decision on the applicant’s fitness and propriety and whether the applicant is competent to carry on any regulated activities.  The IAR should be prepared by an external professional firm which is acceptable to the HKMA.  This will normally be required for an applicant that is new to the securities and futures market of Hong Kong and in cases regarded as especially complex.

If you intend to conduct Initial Public Offering sponsor activities, you are expected to do so through a Type 6 licensed corporation within the same group.

In deciding whether to register or refuse to register an applicant, the SFC shall have regard to any advice given by the HKMA and may rely on that advice in making the decision.

Individuals

Responsible officers

S/he is a licensed representative who is also approved as a responsible officer under section 126 of the SFO to supervise the regulated activity of the licensed corporation to which s/he is accredited.

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General fit and proper requirement

You need to satisfy the SFC that you have fulfilled the fit and proper requirement, having regard to:

  • financial status or solvency,
  • educational or other qualifications or experience having regard to the nature of the functions to be performed,
  • ability to carry on the regulated activity concerned competently, honestly and fairly, and
  • reputation, character, reliability and financial integrity

For more details, please refer to the “Fit and Proper Guidelines”.

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Specific approval criteria

As part of the fit and proper requirement, you should fulfil competence criteria relating to:

  • academic / industry qualification
  • relevant industry experience
  • management experience
  • local regulatory framework paper

For more details, please refer to Appendix B (Test of Competence for Responsible Officers), Table 1 in Appendix C (Required Recognized Industry Qualifications and Local Regulatory Framework Papers for Responsible Officers), Appendix D (Exemptions from the Recognized Industry Qualification Requirement) and Appendix E (Exemptions from the Local Regulatory Framework Paper Requirement) of the “Guidelines on Competence”

You can apply to be a responsible officer for more than one regulated activity simultaneously provided that you meet the fit and proper (including competence) requirements for the regulated activity concerned, and demonstrate that there is no conflict of interest for you to carry on the regulated activities concurrently. You can also apply to be a responsible officer for more than one licensed corporation simultaneously provided that you demonstrate there is no conflict of interest. Typically this will only be possible where the licensed corporations belong to the same group of companies. 

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Sufficient authority

You should have sufficient authority to supervise the business of regulated activity in the licensed corporation that you will be accredited to.

You may or may not be a member of the board of directors of the licensed corporation.

However, if you are a director of the corporation and actively participate in or directly supervise the business of regulated activity, you will be an “executive director” as defined in section 113 of the SFO and must apply to become a responsible officer of the licensed corporation in respect of the regulated activity concerned.

An employer-employee relationship is not a prerequisite for the approval of a responsible officer. For example, a consultant (not being an employee) of a company undertaking to supervise regulated activities is eligible to be approved as a responsible officer. However, that individual must act on behalf of or have an arrangement with the licensed corporation for carrying out the regulated activity.

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Further guidance

Managers-In-Charge of Core Functions (MICs)

Requirement on relevant industry experience for responsible officers

The SFC recognises a broad range of industry experience as being relevant when considering responsible officer applications. For example, experience acquired from sales and marketing of funds, although not directly relevant to investment management, may be recognised in respect of Type 9 regulated activity (asset management). In some situations the SFC may impose a non-sole condition on the related licence (under which the individual must, when actively participating in or when directly supervising the business for which the firm is licensed, do so under the advice of another responsible officer who is not subject to the non-sole condition).  In considering whether an applicant meets the industry experience tests, the SFC will also take into account, amongst other things, his/her overall career history accumulated in the industry.

Overseas residents

  • The SFC will only grant licences to individuals if they will come to Hong Kong to carry on regulated activities on behalf of the licensed corporations they are accredited to.
     
  • If a responsible officer will be stationed overseas and come to Hong Kong to carry on regulated activity from time to time, s/he should expect a non-sole condition (i.e. under which the individual must, when actively participating in or when directly supervising the business for which the firm is licensed, do so under the advice of another responsible officer who is not subject to the non-sole condition) to be imposed on her/his licence.  His/Her principal should ensure that it has sufficient onshore responsible officers who are free from any licensing condition with respect to the regulated activity to supervise the business of regulated activity in Hong Kong.

    For more details, please refer to the circular: “Circular clarifying the licensing obligations of corporations and individuals and more particularly those conducting business outside Hong Kong”.

  • Itinerant professionals should not be responsible officers because responsible officers are required to be responsible for overseeing the regulated activity for which their principal is licensed. Itinerant professionals spend only short periods in Hong Kong from time to time and for specific purposes.  This is generally incompatible with the performance of the obligations that are imposed on responsible officers.

Sponsors

  • The Sponsor Guidelines (Appendix I of the Fit and Proper Guidelines) set out eligibility requirements for being a sponsor principal of a licensed corporation of Type 6 regulated activity that engages in sponsor work.

  • In general, a sponsor principal should be a responsible officer of the sponsor. They should be responsible for supervising the regulated activity at all times and their licence or registration should be free from any condition concerning her/his competence to advise on, or engage in, sponsor work.  However, a sponsor can appoint a responsible officer who is subject to the non-sole condition as sponsor principal, provided that s/he is fully competent to act as a sponsor principal and her/his licence is subject to the condition solely because s/he is based outside Hong Kong.  Such appointment is subject to the sponsor having at least one other sponsor principal (i) who is eligible to act as a sponsor principal under Option 1, (ii) who is based in Hong Kong and (iii) whose licence is not subject to the non-sole condition or any other condition restricting him from advising on, or engaging in, sponsor work.  Itinerant professionals are not eligible to act as sponsor principals.

See also FAQ (Sponsor regime).

Advising on Takeovers Codes

  • Section 1.7 of the Hong Kong Codes on Takeovers and Mergers and Share Buy-backs ("Takeovers Codes") provides that financial and other professional advisers must have the competence, professional expertise and adequate resources to fulfil their role and to discharge their responsibility under the Codes. If the Executive (as defined under the Takeovers Codes) considers that a financial adviser is not able to meet these requirements, s/he may not allow the financial adviser to act in that capacity even if there is no specific restriction stated on the licence.

  • If you intend to advise on matters falling within the ambit of the Takeovers Codes, you are required to demonstrate your competence in Codes-related matters by completing Supplement 11 (Activities in Connection with Matters Regulated by the Hong Kong Codes on Takeovers and Mergers and Shares Buy-backs) and provide certain supporting documents.  In general, you must satisfy the SFC that you have the experience of supervising at least one completed transaction under the Takeovers Codes or the London Takeover Code.

Real Estate Investment Trust (REIT) managers

Fund managers applying to be a responsible officer for Type 9 regulated activity to be accredited to a Real Estate Investment Trust management company are required to demonstrate a track record of at least 5 years in investment management and/or property portfolio management, in addition to the general competence requirements for responsible officers as stipulated in the Guidelines on Competence.

See also FAQ (Companies entering the industry for the purposes of managing real estate investment trusts).

Full licensed representatives

An individual who is granted a licence under section 120(1) of the SFO to carry on one or more regulated activities for a licensed corporation to which s/he is accredited.

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General fit and proper requirement 

You need to satisfy the SFC that you have fulfilled the fit and proper requirement, having regard to:

  • financial status or solvency,
  • educational or other qualifications or experience having regard to the nature of the functions to be performed,
  • ability to carry on the regulated activity concerned competently, honestly and fairly, and
  • reputation, character, reliability and financial integrity

For more details, please refer to the “Fit and Proper Guidelines”.

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Specific approval criteria

As part of the fit and proper requirement, you should fulfil competence criteria relating to:

  • academic / industry qualification
  • relevant industry experience / recognized industry qualification
  • local regulatory framework paper

For more details, please refer to Appendix B (Test of Competence for Representatives), Table 2 in Appendix C (Required Recognized Industry Qualifications and Local Regulatory Framework Papers for Representatives), Appendix D (Exemptions from the Recognized Industry Qualification Requirement) and Appendix E (Exemptions from the Local Regulatory Framework Paper Requirement) of the “Guidelines on Competence”.

See also FAQ (Licensing examinations).

If you intend to be a representative of a licensed corporation of Type 6 regulated activity that engages in sponsor work, you are required to be satisfy additional competence requirements.

See also FAQ (Sponsor regime).

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Itinerant professionals

If you will repeatedly visit Hong Kong on business for a short period each time, you may apply for a representative licence to be an itinerant professional.

Itinerant professionals who perform regulated activities in Hong Kong may be exempted from taking the relevant local regulatory framework paper, subject to the following conditions and undertakings:

    1. Conditions

      The SFC may impose conditions on the licence of itinerant professionals to the effect that they (i) shall not carry out the regulated activity(ies) in Hong Kong for more than 30 days in each calendar year; and (ii) shall at all times be accompanied by a licensed/registered person in performing regulated activities in Hong Kong.

      Without compromising investor protection, the SFC may consider removing the chaperoning requirement as mentioned in condition (ii) and impose an alternative condition to the effect that the individual can only provide services that constitute regulated activities to professional investors as defined under the Securities and Futures Ordinance.

    2. Undertakings

      For itinerant professionals subject to conditions (i) and (ii), the principal should provide a written undertaking to the effect that it will assume full responsibility for the supervision of the individual’s activities during her/his stay in Hong Kong and ensure s/he will comply with the relevant rules and regulations at all times.

      For those subject to the alternative condition, the principal shall provide additional undertakings that it will:

      (i) provide training in the form of a structured course to the individual to ensure that s/he is fully aware of the Hong Kong regulatory framework before s/he commences carrying out regulated activity(ies) in Hong Kong; and

      (ii) comply with the requirements set out under Paragraph (6)(c) of Appendix E of the “Guidelines on Competence”, in which it will arrange at least one approved responsible officer for the regulated activity to directly supervise or otherwise responsible for advising the individual in conducting regulated activity in Hong Kong.


Provisional licensed representatives

An individual who is granted a provisional licence under section 120(2) of the SFO to carry on one or more regulated activities for a licensed corporation to which s/he is accredited (prior to the grant of her/his licence under section 120(1) of the SFO).

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General fit and proper requirement 

You need to satisfy the SFC that you have fulfilled the fit and proper requirement, having regard to:

  • financial status or solvency,
  • educational or other qualifications or experience having regard to the nature of the functions to be performed,
  • ability to carry on the regulated activity concerned competently, honestly and fairly, and
  • reputation, character, reliability and financial integrity

For more details, please refer to the “Fit and Proper Guidelines”.

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Specific approval criteria

As part of the fit and proper requirement, you should fulfil competence criteria relating to:

  • academic / industry qualification
  • relevant industry experience / recognized industry qualification
  • local regulatory framework paper

For more details, please refer to Appendix B (Test of Competence for Representatives), Table 2 in Appendix C (Required Recognized Industry Qualifications and Local Regulatory Framework Papers for Representatives), Appendix D (Exemptions from the Recognized Industry Qualification Requirement) and Appendix E (Exemptions from the Local Regulatory Framework Paper Requirement) of the “Guidelines on Competence”.

See also FAQ (Licensing examinations).

If you intend to be a representative of a licensed corporation of Type 6 regulated activity that engages in sponsor work, you are required to be satisfy additional competence requirements.

See also FAQ (Sponsor regime).

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Provisional licence

A provisional licence is a licence granted to an individual to carry on a regulated activity under section 120(2) of the SFO, pending the completion of the application process to decide upon the grant of a full representative licence as defined under section 120(1) of the SFO.

The SFC may grant you a provisional licence to carry on regulated activity as a representative if you can satisfy the SFC that you are fit and proper and the grant of your provisional licence will not prejudice the interest of the investing public.

If you submit an application to be a licensed representative, you can also apply for a provisional licence.  The fit and proper requirement described above is applicable.  An application fee of $800 for the provisional licence is required, in addition to the application fee to become a normal licensed representative.

Generally, the SFC expects to make a determination with respect to a provisional licence application within 7 business days upon receipt of a properly completed application.

There is no specific expiry date imposed on provisional licences. Your provisional licence, if granted, will be deemed to be revoked when your application to be a normal licensed representative is approved or refused.

Temporary licensed representatives

An individual who is granted a temporary licence under section 121 of the SFO to carry on, for a period not exceeding 3 months, one or more regulated activities for a corporation licensed under section 116 or 117 of the SFO to which s/he is accredited.

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General fit and proper requirement 

You need to satisfy the SFC that you have fulfilled the fit and proper requirement, having regard to:

  • financial status or solvency,
  • educational or other qualifications or experience having regard to the nature of the functions to be performed,
  • ability to carry on the regulated activity concerned competently, honestly and fairly, and
  • reputation, character, reliability and financial integrity

For more details, please refer to the “Fit and Proper Guidelines”.

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Specific approval criteria

As part of the fit and proper requirement, you should fulfil competence criteria relating to:

  • academic / industry qualification
  • relevant industry experience / recognized industry qualification
  • local regulatory framework paper

For more details, please refer to Appendix B (Test of Competence for Representatives), Table 2 in Appendix C (Required Recognized Industry Qualifications and Local Regulatory Framework Papers for Representatives), Appendix D (Exemptions from the Recognized Industry Qualification Requirement) and Appendix E (Exemptions from the Local Regulatory Framework Paper Requirement) of the “Guidelines on Competence”.

See also FAQ (Licensing examinations).

If you intend to be a representative of a licensed corporation of Type 6 regulated activity that engages in sponsor work, you are required to be satisfy additional competence requirements.

See also FAQ (Sponsor regime).

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Temporary representative licence

Under section 117 of the SFO, the SFC may grant a temporary licence to an individual who is regulated by a relevant overseas regulatory body to carry on regulated activities in Hong Kong for a period not exceeding 3 months.

If you apply to be a temporary licensed representative, you are expected to fulfil the following additional requirements:

    1. Similar role overseas

      You should carry on in a place outside Hong Kong an activity which, if carried on in Hong Kong, would constitute carrying on a regulated activity. You should carry on the activity under an authorization by a regulatory organization in that place which, in the SFC’s opinion, performs a function similar to the functions of the SFC. That regulatory organization should be empowered under the law of that place to investigate and (where applicable) take disciplinary action for your conduct in Hong Kong.

      If the regulator in your jurisdiction does not directly authorize you, you will need to satisfy the SFC that:

      (i) The overseas regulator has put in place relevant codes or guidelines that set out the entry requirements applicable to individuals joining the industry under its jurisdiction, e.g. education, training, examination, experience and/or other competence requirements;

      (ii) You are obliged to comply with relevant rules and/or codes or guidelines issued by the overseas regulator that govern your conduct in carrying out regulated activities in the overseas jurisdiction; and

      (iii) The overseas regulator has the power to remove and prohibit unsuitable individuals from carrying out regulated activities under its jurisdiction, e.g. revoking an authorization, or issuing a banning order from entering the industry.

      The list of Acceptable Inspection Regimes (see Appendix A2 of the “Code on Unit Trusts and Mutual Funds”) serves as a useful reference for considering whether the regulator in your jurisdiction performs a function similar to the functions of the SFC. It is not an exhaustive list. Consideration will be given to the above factors on case by case basis.
       
    2. Accreditation to a licensed corporation

      As well as having a similar role overseas, you must be accredited to a corporation licensed under section 117 of the SFO (i.e., a licensed corporation) that is within the same group of companies as your principal in your home jurisdiction.

      Alternatively, you must intend to be accredited to a temporary licensed corporation and seek to be licensed as a temporary representative solely for the conduct of its business in the activity referred to in its licence application.

    3. Restriction on types of regulated activity

      A temporary licence holder may only carry on one or more of the following regulated activities:

      Type 1 (dealing in securities)
      Type 2 (dealing in futures contracts)
      Type 4 (advising on securities)
      Type 5 (advising on futures contracts)
      Type 6 (advising on corporate finance)
      Type 10 (providing credit rating services)

    4. Licensed period

      Your temporary licence, if granted, will be for a duration of not more than 3 months at any one time.  You will not be granted temporary licences for more than 6 months in total within any period of 24 months.
3.5058 s