Content as of September 2026. Reviewed quarterly against the SFC's latest publications.
For companies planning to conduct securities, futures, asset management, or virtual asset business in Hong Kong, a licence from the Securities and Futures Commission (SFC) is the first unavoidable threshold. Based on the SFC's licensing regime under the Securities and Futures Ordinance (SFO), this article maps the licence categories, application requirements, exemptions, and post-licensing obligations — so applicants can see the whole picture before they start.
1. First, Find Out Which Type Your Business Falls Into
The SFO defines 13 types of regulated activity:
| Type | Regulated activity |
|---|---|
| Type 1 | Dealing in securities |
| Type 2 | Dealing in futures contracts |
| Type 3 | Leveraged foreign exchange trading |
| Type 4 | Advising on securities |
| Type 5 | Advising on futures contracts |
| Type 6 | Advising on corporate finance |
| Type 7 | Providing automated trading services |
| Type 8 | Securities margin financing |
| Type 9 | Asset management |
| Type 10 | Providing credit rating services |
| Type 11 | Dealing in or advising on OTC derivative products (to take effect when the new licensing regime is implemented) |
| Type 12 | Providing client clearing services for OTC derivative transactions (same as above) |
| Type 13 | Providing depositary services for relevant collective investment schemes (effective 2 October 2024) |
In addition, operating a virtual asset trading platform requires a separate virtual asset service licence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO) regime (effective June 2023); central virtual asset trading platforms are subject to a dual-licensing arrangement — Types 1 and 7 under the SFO plus the AMLO-regime licence.
Practical point one: licensing follows the substance of the business, not what the company calls itself. One company often needs several types — a firm dealing in securities (Type 1) typically applies for Type 4 (advising on securities) alongside; the same logic pairs Type 2 with Type 5.
Practical point two: make full use of the incidental exemption. A licensed corporation need not be licensed for another regulated activity that is wholly incidental to its licensed business. A Type 9 (asset management) licensee, for example, may be exempt from Types 1, 2, 4, and 5 where those activities arise solely from its asset management business. A group exemption also exists — advising wholly-owned subsidiaries or a holding company does not require Types 4, 5, 6, or 9 licences. An exemption analysis before applying can save the cost of an entire licence category, both in application and maintenance.
2. The Six Thresholds of an Application
1. Incorporation. The applicant must be a company incorporated in Hong Kong, or an overseas company registered with the Hong Kong Companies Registry.
2. Responsible Officers (ROs). At least two ROs must be appointed for each regulated activity to directly supervise it; at least one RO per activity must be available at all times to supervise the business; and at least one RO must be an executive director as defined under the SFO. RO candidates are the most common bottleneck in practice — credentials, experience, and the feasibility of "available at all times" are all closely scrutinised.
3. Licensed representatives. Every individual who carries on a regulated activity for a licensed corporation must be licensed.
4. Senior management and Managers-in-Charge (MICs). The SFC defines eight core functions for a licensed corporation (overall management oversight, key business lines, operational control and review, risk management, finance and accounting, information technology, compliance, and anti-money laundering). Each must have at least one MIC; the MICs for overall management oversight and key business lines must be ROs. One person may hold several functions, but segregation of duties must be clear.
5. Fit and proper. The applicant and relevant individuals must demonstrate to the SFC: sound financial standing, appropriate qualifications or experience, competence, honesty and fairness, and reputation, character, and reliability.
6. Financial resources. Paid-up share capital and liquid capital must be maintained at all times at or above the minimums specified in the Securities and Futures (Financial Resources) Rules for the relevant types — thresholds vary significantly by type, so check them one by one against your target categories before applying.
3. The Licence Is the Beginning: The Ongoing Obligations List
- Staffing: appoint a compliance officer and an operations manager with a finance, accounting, compliance, or risk management background; ROs must not perform compliance functions (segregation requirement);
- Continuous professional training (CPT): assess training needs at least annually. Since 1 January 2022, the SFC assesses CPT requirements per individual, not per regulated activity. Licensed representatives must complete a minimum of 10 CPT hours per calendar year; responsible officers and executive officers must complete a minimum of 12 hours, of which at least 2 hours must cover regulatory compliance. Within these hours, every licensed individual must complete at least 5 hours on topics directly relevant to the regulated activities for which they are licensed, and at least 2 hours on ethics or compliance topics. Failing to meet CPT requirements may call an individual's fitness and properness into question and can lead to disciplinary action.
- Audited accounts: submit within four months after each financial year end;
- Financial resources returns: within 21 calendar days after each month end; corporations licensed only for Types 4, 5, 6, and/or 9 and subject to the "no client assets" condition may file semi-annually instead;
- AML framework: design and implement policies, procedures, and controls in accordance with the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (for Licensed Corporations);
- Internal controls: implement appropriate and effective internal control procedures under the Management, Supervision and Internal Control Guidelines.
Virtual asset service providers face additional requirements: client assets must be held in trust through an associated entity; a Phase 1 external assessor report must be submitted with the licence application, a Phase 2 report after approval-in-principle, and annual review reports within four months of each financial year end thereafter.
4. Four Practical Suggestions for Applicants
First, run a feasibility study before filling in forms. Assess whether your current or planned activities constitute regulated activities, which types to apply for, and whether the fit-and-proper competence requirements are met — this step prevents the most common rework.
Second, lock in RO and MIC candidates early. Without the people, no amount of polished documentation will move the application.
Third, design ongoing obligations as part of the application. The compliance officer arrangement, the FRR filing cadence, and the AML framework should take shape at the application stage — not after licensing.
Fourth, budget time for regulatory queries. The SFC typically raises several rounds of questions after submission; the quality of your replies directly drives the timeline. Preparation quality is the only variable fully within the applicant's control.
This article is based on the SFC's public licensing regime and the Securities and Futures Ordinance. It is for reference only and does not constitute legal advice. Requirements are subject to the SFC's latest publications.
Sources:
- Securities and Futures Commission (SFC) — licensing regime, Licensing Handbook, and regulatory guidelines
- Securities and Futures Ordinance (Cap. 571)
- Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)