Which SFC regulated activity license do you need? We break down the Securities and Futures Ordinance (Cap. 571), RO requirements, capital requirements, and compliance costs.
By Easy Biz Team at Easy Solution (HK) Limited · Published 5 July 2026 · 10 min read
An SFC license is issued by the Securities and Futures Commission (SFC) under the Securities and Futures Ordinance (SFO, Cap. 571). It authorises a corporation or individual to carry out one or more of ten regulated activities in Hong Kong's financial markets. Operating a regulated activity without a license is a criminal offence under Section 114 of the SFO.
The SFC regulates Hong Kong's securities, futures, leveraged forex, and asset management industries. It is one of the most respected financial regulators in Asia, and obtaining an SFC license signals credibility to institutional and retail clients alike.
While there are ten regulated activities defined in Schedule 5 of the SFO, the three most commonly sought licenses are:
| Type | Regulated Activity | Typical Business |
|---|---|---|
| Type 1 | Dealing in securities | Brokerage, securities trading |
| Type 4 | Advising on securities | Investment advisory, research |
| Type 9 | Asset management | Fund management, portfolio management |
A Type 1 license authorises the holder to deal in securities (shares, bonds, debentures, etc.) as principal or agent. This is the license required for securities brokerages, including online trading platforms. Type 1 licensees may hold client assets (subject to additional conditions) and are subject to the most stringent capital requirements.
A Type 4 license covers providing advice on securities. This is suitable for investment advisory firms, research houses, and financial consultants. Type 4 licensees typically do not hold client assets, so the capital requirements are lower. Many firms combine Type 4 with Type 9 for a full asset management offering.
A Type 9 license authorises the holder to provide asset management services — managing portfolios of securities or futures contracts on behalf of clients. This is the license held by hedge funds, private equity firms, and discretionary fund managers. If the Type 9 licensee does not hold client assets (i.e., assets are held by an independent custodian), capital requirements are significantly reduced.
Every licensed corporation must appoint at least two Responsible Officers (ROs), at least one of whom must be an executive director based in Hong Kong. ROs are personally approved by the SFC and bear personal regulatory liability for the firm's compliance.
To qualify as an RO, an individual must:
Finding qualified ROs is often the biggest bottleneck in the SFC licensing process. When acquiring an existing licensed corporation, the incumbent ROs may stay on, easing the transition.
The SFC imposes minimum capital requirements that vary by license type and whether the firm holds client assets:
| License Type | Min. Paid-Up Capital | Min. Liquid Capital | Holds Client Assets? |
|---|---|---|---|
| Type 9 (no client assets) | HKD 5,000,000 | HKD 3,000,000 | No |
| Type 9 (client assets) | HKD 10,000,000 | HKD 4,000,000 | Yes |
| Type 1 | HKD 10,000,000 | HKD 3,000,000 | Typically yes |
| Type 4 | HKD 5,000,000 | HKD 3,000,000 | No |
In addition, licensed corporations must maintain a minimum amount of liquid capital at all times and comply with the Financial Resources Rules (FRR) under Cap. 571.
Licensed corporations must submit monthly Financial Resources Rules (FRR) returns to the SFC, demonstrating continuous compliance with the capital requirements. Other ongoing obligations include:
Rather than applying from scratch (which takes 4–7 months), many firms choose to acquire an existing licensed corporation via share transfer. This approach offers several advantages:
The acquisition process involves these key steps:
Step 1: Identify a suitable licensed corporation with the correct license types.
Step 2: Conduct thorough due diligence — review compliance history, SFC correspondence, audit reports, client base, and any open investigations.
Step 3: Sign a Sale & Purchase Agreement subject to SFC approval.
Step 4: File a Section 132 application with the SFC for approval of the change in controlling shareholders. The SFC will assess the new controllers' fitness and properness.
Step 5: Upon SFC approval, complete the share transfer and file updates with the Companies Registry.
Step 6: Notify the SFC of changes to directors, ROs, and business operations as needed.
| Factor | Acquire Existing | Apply New |
|---|---|---|
| Timeline | 6–8 weeks | 4–7 months |
| SFC approval | Section 132 (change of control) | Full license application |
| Cost | HKD 1.5M–3M (depending on license types) | HKD 500K–1M (consulting + fees) |
| RO requirement | Incumbent ROs may stay | Must recruit ROs from scratch |
| Risk | Inherits compliance history | Clean record |
Can one corporation hold multiple SFC license types?
Yes. It is common for a licensed corporation to hold Type 1 + Type 4, or Type 4 + Type 9. Each additional regulated activity requires additional ROs qualified in that activity and may increase capital requirements.
Do I need SFC approval to change shareholders of a licensed corporation?
Yes. Under Section 132 of the SFO, SFC prior written approval is required before any person becomes a controlling shareholder (generally, holding 10% or more of the voting rights) of a licensed corporation.
What are the annual fees for maintaining an SFC license?
Annual license fees range from approximately HKD 12,000 to HKD 47,000 per regulated activity per entity. There are also additional fees for each RO and representative.
Browse our marketplace for licensed companies, or contact us for a confidential consultation on Section 132 approval and the transfer process.
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