Type 9 (Asset Management) Licence Application

Asset Management

Over the past five years, we have helped over ten corporate clients obtain their licence to carry on Type 9 regulated activities. We can provide tailor made solutions to clients of different structures, including local enterprises, SOE(s) and international firms, according to their own needs. A general introduction about how corporations apply for a licence for asset management is provided below.

Who Should Apply

Short answer: 

Any corporations intend to engage in asset management and fund advisory business shall apply for a licence.

Long answer:

Any corporations intend to engage in Type 9 (asset management) regulated activity shall apply for a licence. Type 9 (asset management) regulated activity is defined in Schedule 5 to the SFO as (i) real estate investment scheme management; or (ii) securities or futures contracts management.

Real estate investment scheme management, in relation to a person, means providing a service of operating a collective investment scheme for another person by the person, where

(a) the property that is being managed under the scheme consists primarily of immovable property; and

(b) the scheme is authorised under section 104 of the SFO.

Securities or futures contracts management, in relation to a person, means providing a service of managing a portfolio of securities or futures contracts for another person by the person, otherwise than by:

(a) a corporation which provides such service solely to any of its wholly owned subsidiaries, its holding company which holds all its issued shares, or other wholly owned subsidiaries of that holding company;

(b) a person who is licensed for Type 1 or Type 2 regulated activity who provides such service wholly incidental to the carrying on of that regulated activity;

(c) an authorized financial institution which is registered for Type 1 or Type 2 regulated activity which provides such service wholly incidental to the carrying on of that regulated activity;

(d) an individual —

(i) whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 1 or Type 2 (as the case may be) regulated activity by an authorized financial institution registered for that regulated activity; and

(ii) who provides such service wholly incidental to the carrying on of that regulated activity;

(e) a solicitor who provides such service wholly incidental to his practice as such in a Hong Kong firm or foreign firm within the meaning of the Legal Practitioners Ordinance (Cap. 159);

(f) counsel who provides such service wholly incidental to his practice as such;

(g) a certified public accountant who provides such service wholly incidental to his practice as such in a practice unit as defined by section 2(1) of the Accounting and Financial Reporting Council Ordinance (Cap. 588); or 

(h) a trust company registered under Part 8 of the Trustee Ordinance (Cap. 29) which provides such service wholly incidental to the discharge of its duty as such.

General Requirements

Establishing a Hong Kong Company

For a corporation to be licensed to carry out regulated activities in Hong Kong, it has to be either a company incorporated in Hong Kong or an overseas company registered under Part 16 of the CO having a principal place of business in Hong Kong (i.e. branch company) .

Capital Requirements

For Type 9 regulated activity, the minimum capital requirements are:

Responsible Officers

Short answer: at least two RO(s)

Long answer:

At least two ROs shall be appointed and approved by the SFC while at least one of the ROs must be an executive director. Also, at least one RO has to be available at all times to supervise the business of the regulated activity and must reside in Hong Kong. It is not strictly necessary for another RO to reside in Hong Kong provided he is able to satisfactorily discharge his responsibility to supervise the business. Relevant factors will include the frequency of the ROs visits to attend to regulated activities in Hong Kong and the internal control systems.

Licence Application Duration (The SFC’s Performance Pledge)

It is worth noting that it is likely the SFC may raise further questions before formal acceptance of the licensing application and the time frame only begins after such formal acceptance. Also, the above timing does not include the amount of time required for preparation of the materials, while the duration required for preparation is subject to the preparedness and responsiveness of the client and normally this would take 3 to 4 weeks approximately.

How Alles Helps

The Preliminary Stage

As your consultant, we will have meetings with your representative to understand your unique circumstances and advise accordingly before making a licensing application.  To demonstrate, for clients rooting for time efficient solutions, application for licence may not be the wisest strategy while alternatives, such as buying an existing licensed corporation, may be more beneficial. We use our best endeavours to advise our clients what to do to best suit their goals.

The Submission Stage

After the preliminary stage, we will prepare the prescribed forms together with supporting documents (including, inter alia, business plan, compliance manual, template client agreement, organisation charts, workflow diagrams, resume and licensing record of proposed responsible officers etc.).

The Enquiry Stage

After reviewing our submission bundle, the SFC will raise further questions before and after formal acceptance. On behalf of our client, we will directly communicate with the SFC after getting the requisite information from our client. It follows if the SFC has any requirements for the company to fulfil before approval, such as signing of a declaration letter, our assistance is in place to make effective response.

Success and On-going Compliance

After success, our client may appoint us as their Compliance Consultant for further obligations, including submission of FRR and individual licensing applications. For more details, please visit On-going Services.

Compliance requirement varies from situation to situation. You are welcomed to schedule a call with us so we can offer customised services that best fit your needs.

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