SFC Type 9 License Services in Hong Kong
Primasia Corporate Services Limited provides SFC Type 9 license services which comply with Hong Kong standards, thus keeping your asset management business compliant with the Securities and Futures Commission requirements. Our team provides comprehensive assistance from the moment of applying for the license until the compliance with regulatory requirements to establish and run your asset management business in Hong Kong.
SFC Type 9 License Information
The SFC Type 9 license is issued under the Securities and Futures Ordinance and is related to the regulation of asset management services which include the management of portfolios of securities and/or futures contracts. According to the Schedule 5 of the SFO, Type 9 regulated activity includes “asset management”, which involves the management of portfolios of securities and/or futures contracts and real estate investment scheme management.
Every company which has a discretionary investment authority over client portfolios which contain securities and/or futures contracts should have the Type 9 license. Discretionary accounts are characterized by the fact that the investment decisions in them do not require clients’ approval on every transaction and such discretionary investment authority must be duly delegated by the client. Non-discretionary advisory services do not involve discretionary investment authority and fall under other regulated activities like Type 4 (advising on securities) or Type 1 (dealing in securities).
There are some exemptions from Type 9 license requirement. There is no requirement to be licensed if the entity manages only other wholly owned subsidiaries under the intra-group exemption. Solicitors are exempt from the requirement to have the Type 9 license if they advise on securities on an incidental basis to their practice of law. Trust companies can be exempt from the requirement to have the Type 9 license when asset management is not the main business for the trust company. Some types of professional investors are also exempt from having the Type 9 license where the service is wholly incidental to another regulated activity.
Advantages of Obtaining a Type 9 License in Hong Kong
- Access to Asian capital markets. SFC Type 9 license gives a high degree of credibility with the institutional investors in the region. Type 9 license allows the company to manage collective investment schemes including private equity funds, hedge funds, REITs. Besides, the license gives you the opportunity to access regional distribution and cross-border fundraising.
- Clear regulatory regime. The Securities and Futures Commission issues detailed regulations regarding competence, capital requirements, internal control system, etc. in its Licensing Handbook, Financial Resources Rules, and Guidelines on Competence. The regulatory regime of Hong Kong provides clear obligations for licensed corporations instead of vague expectations.
- Professional investor exemptions. Most of the Type 9 licenses allow providing services only to professional investors in Hong Kong. If all of your clients are professional investors, some regulated activities performed in the course of asset management can be exempt from licensing because they are wholly incidental to the main activity.
- Gateway to Mainland China. Qualified entities with Type 9 license can benefit from cross-border mutual recognition of funds. Moreover, nowadays, the SFC increasingly recognizes Mainland professional and academic qualifications for competence assessment, thus expanding the range of potential employees for fund managers.
- Competitive operating environment. You can legally operate retail mutual funds in Hong Kong using the SFC Type 9 license. Together with the absence of capital gains tax and other advantages of investing in Hong Kong as a regional hub, it gives a cost-efficient operating environment for asset management businesses in the Asia Pacific region.
Establish Your Asset Management Business with Hong Kong Type 9 License Services by Primasia
Choice of the licensing company determines whether the application will proceed seamlessly or will be delayed due to some questions raised by the SFC regarding the credentials of responsible officers, internal control or adequacy of capital. Some typical reasons for license application delays are failure of the “fit and proper” test, insufficient business plan, or inadequate estimates of liquid capital required to cover your operating expenses during the first six months.
Since 1987, we assist our clients with establishing businesses in Hong Kong and other jurisdictions as a licensed Trust or Company Service Provider offering comprehensive corporate services. We prepare SFC license applications for Type 1, 4 and 9 regulated activities by developing business plans, drafting internal control framework, identifying and registering responsible officers, and estimating your capital resources to prove compliance with all the requirements from day one. We cover the whole spectrum of asset management services needed to go from license application to operation of your business.
Processing time for Type 9 license application takes about 4 to 6 months including documentation preparation and SFC review. Our team structures every application in a way that it meets the SFC requirements on the first attempt, thus avoiding the back and forth which extends processing time.
Contact us to learn more about your SFC Type 9 license needs and expected timeline.
Why Should You Choose Primasia’s SFC Type 9 Licensing Team?
- Knowledge of local regulations. Our team works with SFC Licensing Handbook, Code of Conduct, Financial Resources Rules, and Guidelines on Competence directly. We monitor the changes in regulations, for example, we recently helped our clients to adjust their internal control frameworks according to the SFC circular issued in July 2024 on internal control for liquid capital monitoring.
- Team speaking English, Cantonese, and Mandarin. The multilingual team allows us to work easily with responsible officers working in Mainland China, prepare bilingual compliance documentation, correspond with the SFC.
- Experience with different asset management structures. Our team can help hedge fund managers, private equity fund managers, REIT management companies, and firms whose portfolios have virtual asset exposure. In the case of virtual asset fund managers, the SFC imposes VAFM Terms and Conditions. Our team will make sure you understand and comply with those terms.
- Comprehensive scope of services. Our team prepares your company incorporation, develops business plan, prepares internal control manual, identifies and registers responsible officers, checks compliance with capital resources requirements and communicates with the SFC on behalf of the client in the whole process of licensing.
Our SFC Type 9 License Services in Hong Kong
Our team assists asset management firms at every step of the process: from corporate license application, license condition modification, addition of regulated activity to changes of substantial shareholders or responsible officers, often integrating company registration and wider corporate support services in Hong Kong.
License Application & Setup
- Company incorporation. Applicants must be a Hong Kong incorporated company or an overseas company registered under Part 16 of the Companies Ordinance with a principal place of business in Hong Kong. Applicants must have secure office premises in Hong Kong. Our team helps you with company registration and ensures the proper business structure is met.
- Application preparation and filing. The corporate license application includes Form 1 for the licensed corporation, Forms 5 and 6 for responsible officers and licensed representatives and supplementary questionnaires on business profile, internal control, and substantial shareholders. The application fee is HK$4,740 per regulated activity.
- Responsible officer appointment. Every Type 9 license should have at least two responsible officers. One of the responsible officers must be an executive director and at least one must be resident in Hong Kong and be able to supervise the business in real time. Responsible officers must be approved by the SFC and must have the experience in exercising discretionary investment authority over portfolios.
- Business plan and compliance manual. We develop the business plan for the fund including structure, governance, risk management, revenue estimation. The internal control manual includes compliance framework, AML/CTF procedures, operational processes.
Requirements to the personnel and compliance
The responsible officers must have relevant industry experience; the SFC requires at least eight years for managing private investment funds. They must have demonstrated management skills and ability to supervise the business of the firm. Relevant educational or other qualifications and industry qualifications are considered in the process of competence evaluation.
All licensed representatives who act under the corporation must be “fit and proper” and, depending on their roles, pass relevant examination papers. Compliance officer must be appointed to perform internal control, risk management and AML/CTF duties. Manager-in-charge must supervise eight prescribed core functions, thus ensuring each particular core function and key business line function are supervised.
Continuous professional training is obligatory. The SFC requires from licensed persons to undertake specified number of hours of CPT courses including local regulatory framework paper and regulatory knowledge.
Ongoing Regulatory Compliance
SFC requires licensed corporations to comply with financial resources rules at all the times. Capital requirements are tiered:
| Requirement | Not Holding Client Assets | Holding Client Assets |
| Minimum Paid-up Capital | Exempt | HK$5,000,000 |
| Minimum Liquid Capital | HK$100,000 | HK$3,000,000 |
| Financial Returns Filing | Semi-annual | Monthly |
| Type 9 license holders do not hold client assets; that is why the minimum paid-up capital is exempt and the firm must have the minimum of HK$100,000 in liquid capital. Firms which hold client assets must have a minimum paid-up capital of HKD 5 million and HK$3,000,000 in liquid capital, and submit monthly financial resource returns. |
Also, it is necessary to estimate the operating expenses of the firm for the first six months and demonstrate that the excess of liquid capital is sufficient to cover them. If the estimated operating expenses exceed the capital, a board-approved plan of funding with sources of funding must be submitted.
It is required to submit audited accounts within four months from the end of the financial year. License condition modifications (responsible officers, regulated activities, substantial shareholders) are required to be approved by the SFC beforehand. Our team provides the assistance with accounting and reporting coordination and capital monitoring during the license term. According to the SFC circular issued in July 2024, the firm is required to inform the Commission if its liquid capital falls below 120% of the required minimum.
Leading Hong Kong SFC Type 9 License Services
- Knowledge of local regulations tailored to every client’s structure. Our team develops application depending on whether the firm performs discretionary portfolio management services for professional investors, operates collective investment scheme, or manages REIT requiring Type 6 license for corporate finance advisory.
- Multilingual team with decades of experience in Hong Kong licensing process. We assisted fund managers operating in traditional securities, private equity, venture capital, and virtual assets.
- Track record. We helped startups to obtain their first Type 9 license, as well as restructuring or adding regulated activities to established firms.
- Comprehensive scope of services from application till ongoing compliance. We simplify the regulation process by assisting with submissions, capital monitoring, and coordination with company secretarial services.
- Accurate and timely correspondence with SFC. We communicate with SFC regarding the queries, amendments, and inspection, thus allowing your compliance officers and management to focus on asset management and serving your clients.
