Licensed individuals providing financial services in HK SAR are required to do so as per a special code of conduct. Those seeking to obtain a financial services license in HK SAR should submit their applications to the SFC. Charged with regulation of the financial market in HK SAR, it is a sole regulatory authority entrusted with issuing financial licenses.
There is also HKMA-developed guidance which provides detailed information on the requirements for banking establishments. It also contains its own code of conduct, setting out business conduct standards for authorized banking establishments & their personnel.
Obtaining a Broker License in HK SAR
Companies involved in operations with futures & securities must abide by SFC-issued codes & guidelines. Pursuant to the SFO, such firms are required to employ at least 1 person per an activity they are licensed for. This individual is charged with monitoring the company’s operation & ensuring compliance with relevant regulations, which includes powers to resort to disciplinary sanctions.
The above requirements are also applicable to banks that have a license authorizing engagement in operations related to futures & securities. As far as the role of senior officials is concerned, the SFC tends to take a more conventional approach, preferring to rely on banks’ directors & officers charged with overseeing regulatory compliance.
Providing Financial Services in HK SAR: Responsibilities of Senior Management
Bank’s directors can bear individual responsibility for violations committed by companies that furnish financial services in HK SAR. According to the SFO, the SFC is authorized to seek an injunction against individuals committing violations of law, no matter how minor they are. If deemed liable for unlawful actions of companies providing financial services, licensed entities’ directors may also be subject to disciplinary action on the part of the SFC.
The SFC can file a civil claim against certain directors, inter alia, for their failure to timely disclose internal information. Cases like these serve to remind of the personal responsibility that directors bear before their companies, including an obligation to keep abreast of management problems or their companies’ abidance by regulatory requirements. Therefore, getting a broker license in HK SAR requires applicants to be sufficiently knowledgeable & abide by the rules established by the local regulators.
To obtain a license, SFC-regulated entities must abide by the standards of communication with customers. There are also rules requiring them to comply with certain standards with regard to conclusion & execution of contracts.
SFC-authorized banks are also advised to observe recommendations contained in the organization’s Code of Practice. Although it is not a prerequisite for obtaining permission to conduct financial activities in HK SAR, it does contain similar recommendations. Those include but aren't limited to:
- account management
- card-related services
- e-banking & payment services
The above recommendations, which place a particular emphasis on fair treatment of customers, reflect the regulator’s policy toward vulnerable groups.
Given tight regulation of the financial sector in HK SAR, obtaining a financial services license in HK SAR will require compliance with numerous requirements. For more information on the specifics of regulatory framework in HK SAR & legal assistance with getting a financial services license in HK SAR, please contact IQ Decision UK.