Securities and Futures Commission (SFC) Licence in Hong Kong: A Complete Guide for Financial Firms and Professionals

Hong Kong remains one of Asia’s most dynamic financial centres, known for its transparent regulations and deep capital markets. At the core of its financial regulatory framework is the Securities and Futures Commission (SFC), which governs all intermediaries and market participants engaged in regulated activities.

This guide explains everything businesses and professionals need to know about obtaining an SFC licence in Hong Kong — including the types of licences available, key eligibility criteria, financial and capital requirements, and a detailed checklist to prepare your company before applying. It also outlines ongoing compliance obligations, common pitfalls to avoid, and the latest updates on virtual asset and fintech licensing under the SFC’s expanding regulatory scope.

For any financial institution, asset manager, or fintech operator planning to conduct investment or securities business in Hong Kong, obtaining the right SFC licence is not just a legal formality — it is a strategic foundation for building client trust and long-term compliance readiness.

Understanding the SFC Licence Framework

The SFC licence is issued under Part V of the Securities and Futures Ordinance (SFO), which governs all securities, futures, and investment-related activities in Hong Kong.

The SFC ensures that only qualified and trustworthy individuals and corporations carry out regulated activities that could affect investors and market integrity.

Key functions of the SFC licence framework include:

• Regulating financial intermediaries such as brokers, asset managers, and investment advisers
• Ensuring market participants meet “fit and proper” standards
• Protecting investors through oversight and enforcement

There is a distinction between licensing and registration: certain activities may require registration with the SFC instead of a licence, particularly for institutions already supervised by another regulator (e.g. banks under the HKMA).

Types of SFC Licences and Regulated Activities

The SFC recognises ten types of regulated activities (RA Types 1–10), each requiring a specific licence depending on the nature of the business.

Some firms hold multiple licences, such as Type 1 + 4 + 9, to cover both advisory and asset management functions. Individuals and corporations must each be licensed if both are directly involved in the regulated activities.

Do You Need an SFC Licence? A Quick Decision Guide

Not every business in the financial sector needs an SFC licence, but many are unaware that their operations fall within regulated boundaries.

You must apply for an SFC licence if your company:

• Trades or deals in securities or futures on behalf of clients
• Provides investment or corporate finance advice
• Manages assets or investment portfolios
• Operates a trading or brokerage platform
• Engages in leveraged FX or margin financing

You may be exempt if your activity is purely incidental to a non-regulated service (e.g. corporate consulting). However, these exemptions are narrow, and incorrect assumptions can lead to non-compliance.

A simple rule of thumb: if your business handles client investments, funds, or advice, a licence is almost certainly required.

SFC Licence Preparation Checklist

Before submitting an application, companies should ensure full readiness. The SFC expects applicants to demonstrate strong governance, adequate financial standing, and clear operational structures.

Corporate Readiness

• ✅ Company Incorporation — Your business must be properly registered in Hong Kong.
• ✅ Defined Scope of Regulated Activity — Identify exactly which of the 10 activity types apply.
• ✅ Adequate Paid-Up Capital — Meet the minimum under the Financial Resources Rules (FRR).
• ✅ Business Plan — Outline operations, client base, and revenue model.
• ✅ Compliance Framework — Have written policies on risk management, AML, and data protection.

Responsible Officers (ROs) and Key Personnel

• ✅ Minimum Two ROs per Regulated Activity — One must be an executive director.
• ✅ Fit and Proper Standard — Each RO must have relevant academic qualifications and experience.
• ✅ Managers-in-Charge (MICs) — Assign MICs for compliance, operations, and risk.
• ✅ Local Presence — Maintain management and control in Hong Kong.

Document Preparation

• ✅ Detailed business plan and compliance manual
• ✅ Organisational chart with reporting lines
• ✅ Proof of capital or audited financial statements
• ✅ Office lease agreement (for local operating address)
• ✅ Application forms and declarations via the SFC WINGS portal

Regulatory Awareness

• ✅ Understand periodic filing and reporting obligations
• ✅ Budget for application and annual licence fees
• ✅ Prepare for SFC interviews or follow-up clarifications
• ✅ Ensure IT and record-keeping systems meet data retention standards

Red Flags to Avoid:
✗ Missing or unqualified ROs
✗ Ambiguous business description
✗ Incomplete compliance manual
✗ Inadequate capital buffer

Financial and Capital Requirements

Under the Securities and Futures (Financial Resources) Rules, all licensed corporations must maintain adequate paid-up and liquid capital.

Typical requirements include:

• Minimum paid-up capital of HKD 500,000 to 10 million, depending on licence type
• Maintaining liquid capital above prescribed thresholds at all times
• Regular submission of financial returns and audited accounts to the SFC

Firms that fail to maintain the required capital can face suspension or revocation of their licence.

Fit and Proper Criteria Explained

The SFC assesses both corporations and individuals against its Fit and Proper Guidelines, evaluating:

• Integrity and Reputation — No criminal, disciplinary, or insolvency record
• Competence and Experience — Relevant track record, education, and professional qualifications
• Financial Soundness — Stable financial position without outstanding regulatory debts
• Management Capability — Adequate supervision, governance, and compliance infrastructure

Applicants must provide evidence supporting these criteria, including academic certificates, employment references, and regulatory clearances where applicable.

Post-Licence Obligations and Ongoing Compliance

Licensing is only the beginning. Once approved, licensees are subject to continuous regulatory oversight.

Key ongoing obligations include:

• Filing annual returns and renewal fees
• Submitting audited financial statements within four months of year-end
• Ensuring R.O. continuous professional training (CPT) — minimum 5–10 hours per year
• Maintaining internal controls and risk management frameworks
• Notifying the SFC of material business or ownership changes

Failure to meet these obligations can lead to disciplinary actions, fines, or licence suspension. 

Also Read: What Is A Company Secretary in Hong Kong & Why You Need One

Common Pitfalls and How to Avoid Them

1. Misclassifying Regulated Activities – Failing to apply for all relevant licence types.
2. Incomplete Application Documents – Missing declarations, CVs, or compliance policies.
3. Insufficient Capital – Falling below FRR minimums after approval.
4. No Local Office Presence – Lack of evidence of operations in Hong Kong.
5. Poor Governance Framework – Absence of internal audit and compliance oversight.

To avoid these pitfalls, applicants should conduct a pre-licensing readiness review with professional advisors before submission.

Virtual Asset and Fintech Licensing Updates

With Hong Kong emerging as a digital asset hub, the SFC introduced a dedicated Virtual Asset Trading Platform (VATP) regime effective 2023.

Under this framework:

• Crypto exchanges offering trading in digital assets must obtain a Type 1 (Dealing in Securities) and Type 7 (Automated Trading Services) licence.
• Virtual asset advisers and fund managers are regulated similarly under Type 4 and Type 9 activities.
• Additional requirements apply to custody, AML/KYC, and investor protection.

Also Read: Money Service Operator (MSO) Licence in Hong Kong: A Complete Guide

How Professional Advisors Can Help

Applying for an SFC licence involves navigating extensive documentation, regulatory interpretation, and procedural compliance. Partnering with a professional advisory firm ensures:

• Accurate licence type identification and documentation preparation
• Full compliance with fit and proper standards
• Efficient communication with the SFC during application review
• Ongoing support for renewals, audits, and compliance monitoring

Where To Next?

Hong Kong’s SFC licensing regime reflects the city’s reputation for sound regulation and investor protection. Businesses that prepare early — with the right documentation, governance structure, and compliance plan — are best positioned for success.

For firms entering or expanding in Hong Kong’s financial sector, understanding the full licensing process is not only about meeting regulatory standards, but about building long-term operational credibility.

Start your SFC licence preparation today. Speak to our experts to ensure your firm is fully compliant and ready for approval.