SFC License in Hong Kong or Securities and Futures Commission is a financial industry regulator operating in Hong Kong. The Commission was created in order to exercise administrative control and regulate the activities of all companies that operate or are in any way connected with the financial sector.
When and for what purpose the Commission responsible for the regulation of securities and futures in Hong Kong was established
Hong Kong has the status of one of the largest and most reliable financial centres in the world. Despite this, the region has quite a few regulators of activities related to financial transactions. The SFC was established in 1989 and today it is one of the oldest financial supervisors.
The most important and, perhaps, the most basic, tasks of the organization are the regulation of the operating activities of all firms with the status of financial companies, and administrative control over all their operations, regardless of the range of their services. The Commission controls not only those enterprises that are registered in Hong Kong, but also those that operate in China as a whole. The regulator, among others, oversees the following commercial entities:
- market makers and brokers;
- investors and large traders;
- all companies that act on the market as issuers of bonds, derivatives, stocks and other similar instruments.
The SFC also oversees the activities of forex brokers. To each of the above companies, the Commission issues a corresponding license that gives the official right to work in this sector.
SFC License in Hong Kong: limits of the regulator’s liability
The SFC is a structure independent of the local government. The regulator receives funding, for the most part, from fees that are collected from the reporting entities. However, unlike, for example, FinCom, the Futures and Securities Commission, which regulates the Hong Kong territory, provides a report on the activities carried out and their results to authorized representatives of government agencies every year.
In general, the SFC task list looks like this:
- defend and contribute in every way to strengthening the integrity of the Hong Kong securities market;
- encourage and maintain reasonable competitiveness, fairness of transactions, orderliness and transparency of the environment in which transactions with securities are carried out;
- ensure compliance with general rules and regulations within the market, in particular, investigate cases in which any violations were noticed;
- issue licensing permits and subsequently provide supervision over companies that are under the regulation of the Commission;
- monitor organizations-registrars of shares, stock exchanges and other platforms of this type;
- render all possible assistance to the development of financial infrastructure;
- regulate the listing procedure within the Hong Kong stock exchange;
- interact with foreign and local regulatory agencies; provide them with the support and professional assistance they need;
- provide assistance to investors.
How to apply for an official financial authorization in Hong Kong
A company that wishes to obtain a financial license from the SFC must fully meet the criteria set by the Commission. The regulator’s employees will check not only the information provided about the officials and shareholders of the applicant company, but also their personal characteristics, in particular, suitability to hold the appointed post, etc.
The SFC will necessarily study all parameters of the application, including:
- the applicant’s solvency and his financial position in general;
- the experience of all persons who are in any way connected with the applicant and are directly related to the provision of services, as well as their qualifications and work experience;
- the company’s ability to carry out regulated transactions without disruption and in accordance with the imposed requirements;
- reliability, profitability and reputation of the structure.
In addition, the financial operator must be willing to demonstrate a willingness to contribute to the development of the Hong Kong financial sector and provide professional services to consumers.
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Our highly professional specialists from Eternity Law International are ready to provide you with assistance in resolving your issue.