SFC Type 4 License in Hong Kong: Advising on Securities

Primasia Corporate Services Limited offers SFC Type 4 licensing services, ensuring compliance with the relevant provisions of the Securities and Futures Ordinance of Hong Kong. Our experienced specialists assist your investment advisory business in obtaining and maintaining a license to advise on securities.

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SFC Type 4 License (Advising on Securities)

The Type 4 license is one of the ten SFC licenses in Hong Kong, which are specified in Schedule 5 of the Securities and Futures Ordinance. It is issued to persons engaged in the regulated activity of advising on securities. Activities permitted under the Type 4 license are provision of investment advice to clients, issuance of research reports and verbal investment recommendations to securities clients in Hong Kong.

Businesses That Require a Type 4 License in Hong Kong

The vast majority of investment research firms, wealth management advisory and portfolio consultants require this license. The list of securities advisory services under Type 4 license includes equity research, bond research, structured product advice, investment strategy consulting. Discretionary account management, trading of securities and managing client portfolios is not included in the list of permitted activities and requires another type of license, not the Type 4. Discretionary account management is prohibited for a person holding a Type 4 license; a Type 9 license is required for that activity.

Why the Advantages of an SFC Type 4 License Typically Outweigh the Efforts Needed to Obtain It

  • Legal right to provide investment advice regarding securities to your clients in Hong Kong without any risk of penalties for performing unlicensed advisory services under the SFO
  • Credibility and trust with professional investor clients, due to the recognition that the firm satisfies the SFC’s standards of competence, financial stability and internal control
  • Access to the Hong Kong capital market and cross-border advisory services linked with the securities and futures markets of Mainland China
  • Regime supporting cross-border advisory services throughout Asia; the SFC recognizes industry experience in Mainland China under certain conditions
  • Fee-chargeable structure within the recognised licensing regime; licensed persons are able to charge for their advisory services
  • For clients interested in comprehensive access to the Chinese market, we also provide Full China Services

However, there are also some exemptions from the licensing obligation under the SFO. Solicitors are exempt from the need to have a license for advisory services that are wholly incidental to their professional legal practice. Some group companies are able to provide certain advisory services without a license under the group company exemption, if advisory services are given exclusively to wholly owned subsidiaries or the holding company. Some activities of professional investors do not require a license under the SFO under certain conditions. Trust companies are also exempt for advisory services that are wholly incidental to their duties as trustees. Finally, journalists and media organizations are exempt from the Type 4 licensing requirement for distribution of generic factual market information in publications or broadcasts.

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Start Your Investment Advisory Business in Hong Kong with Type 4 Licensing Services by Primasia

Choice of an appropriate SFC licensing agency is decisive for the regulatory future of your advisory business and its credibility with your Hong Kong clients. Type 4 licenses are crucial for the financial community of Hong Kong, and the procedure of obtaining this license implies strict compliance with documentation, requirements for responsible officers, and compliance system established by the Securities and Futures Commission.
We ensure compliance of your application for SFC Type 4 license with all the requirements of the SFC. Our specialists have many years of experience with licensing of Type 4 businesses like investment analysts, advisers and portfolio consultants and will assist you with obtaining your license in the most efficient way. Whatever your goal, launching a new advisory business or expanding your current activities in Hong Kong, we are ready to help with our Type 4 licensing services.

Contact our SFC licensing specialists for more details about Type 4 license and start your investment advisory practice in Hong Kong.

SFC Type 4 License Services in Hong Kong

Types of SFC Type 4 Licensing Services in Hong Kong Provided by Primasia

We provide full licensing services for investment advisory firms, research analysts, wealth management companies operating in Hong Kong’s securities and futures markets.

Type 4 Application & Structure

  • Application for SFC Type 4 license and assistance with documentation; the application is filed using SFC’s WINGS-LIC platform
  • Coordination with lawyers, auditors, compliance specialists
  • Type 4 licensee must be a company incorporated in Hong Kong or registered overseas
  • Identification and qualification of responsible officers for Type 4 activities; at least two responsible officers must manage the regulated activities, at least one of whom must be an executive director of the corporation; the SFC performs background checks on key personnel before licensing
  • Submission of business plan with the application for SFC licensing; the plan must include scope of advisory services, target customers, fee structure and samples of advisory reports

Compliance & Requirements

  • Annual SFC filing and reporting; compliance requires regular submission of reports
  • Continuous Professional Training (CPT) management for each licensed representative
  • Samples of investment advisory agreements and procedures for client onboarding
  • Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance procedures
  • Book and records keeping and report submission; the SFC audits compliance of licensees with licensing requirements

Corporate Services

  • Company incorporation in Hong Kong for your SFC Type 4 licensed corporation; applicants must have a physical office in order to obtain a Type 4 license
  • Registered office and Hong Kong company secretarial services
  • Opening of corporate bank account for your licensed investment advisory business
  • Purchase of professional indemnity insurance
  • Accounting and tax services for financial compliance
Requirements for SFC Type 4 License in Hong Kong

Capital Requirements for SFC Type 4 License

Applicant must demonstrate financial stability and integrity. In addition, the fit-and-proper criteria, namely financial status, qualifications and experience, competence and reputation, must be satisfied by the key personnel under Section 129 of the SFO.

If the business does not hold client assets

Minimum liquid capital is HKD 100,000; there is no minimum paid-up share capital requirement.

When the business holds client assets

Minimum paid-up share capital is HKD 5,000,000; minimum liquid capital is HKD 3,000,000.

We align your business structure with the relevant capital requirements from the very beginning.

Choose Primasia for SFC Type 4 Licensing

We provide a complete solution for SFC licensing, leaving your team time to concentrate on running the business.

  • Local experts with international standards as one of the leading SFC Type 4 licensing agencies in Hong Kong
  • Professional multilingual team with decades of experience in working with the Securities and Futures Commission
  • Successful experience in assisting with application and structuring of Type 4 licenses for investment research firms, fund managers and wealth management companies
  • Comprehensive assistance with SFC licensing from application to continuous compliance

Whatever you need, only SFC Type 4 licensing consultation, Type 4 license combined with Type 1 license for securities dealing or a full package of advisory services including fund administration and fund accounting, our specialists will find an optimal solution for your business.

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John Barclay

John Barclay

Chairman

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Teresa Tam

Teresa Tam

Managing Director

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Stella Shiu

Stella Shiu

Director, Company Secretarial Services

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Samantha Tse

Samantha Tse

Director, Accounting Services

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Clare Lam

Clare Lam

Assistant Company Secretarial Manager

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Takky Chan

Takky Chan

Assistant Accounting Manager

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FAQs: SFC Type 4 Licensing Services in Hong Kong

Under the Type 4 license one can advise on investments in securities, including shares, bonds, funds, interests in collective investment schemes, structured products. Providing investment research services and reports to securities investors also requires Type 4 license. Some activities are exempt from licensing requirements; for example, a Type 1 licensed firm can give advice that is wholly incidental to its securities dealing business without having a separate Type 4 license; an insurance intermediary giving advice on investment-linked assurance schemes can fall into a certain exemption; finally, in-house legal advisers giving advice that is wholly incidental to their legal practice are exempt.

Investment research analysts, portfolio advisors and wealth management consultants advising clients on investments in securities must be licensed as representatives. Licensed corporations must appoint at least two responsible officers, at least one of whom must be an executive director of the corporation and at least one of whom must have experience of advising on securities. SFC review of the application also involves interviews with proposed responsible officers. Responsible officers must pass HKSI Licensing Examination Papers 1 and 2 (regulatory framework) and Papers 7 and 8 (industry qualification, Financial Markets and Securities), or have equivalent recognized qualifications, such as a CFA charter with an approved waiver; licensed representatives require Papers 1, 7 and 8. Our specialists will take care of your qualification and licensed representative application process.

According to the published service commitment of the SFC, it takes approximately 15 weeks from the date of receipt of a complete licensing application, but it is a service target, not a statutory deadline, and depends on various factors including complexity of the case, workload of the case officer and response of the applicant to queries on the business plan, sample reports and responsible officer qualifications. On average, an applicant can expect 3.5-4 months to obtain a license. Detailed documentation and preparedness of responsible officers facilitate the process. We make sure that your application is complete and help you to avoid any delays.

Yes, we can help with annual SFC filings, Continuous Professional Training management, updates on regulatory changes. We also provide ongoing compliance services, including agreement templates, procedures of book and records keeping and preparation for audits. The SFC audits compliance of licensees with licensing requirements; in addition, licensed persons must continue to meet SFC’s financial resource requirements under the Securities and Futures (Financial Resources) Rules, including informing the SFC of the reduction of liquid capital to or below the required minimum. Our Type 4 compliance services will help your investment advisory business maintain high regulatory standing with the SFC.