Hong Kong Type 3 Forex License
- a22162
- Aug 6
- 5 min read
Hong Kong Type 3 Forex License
Type 3 Leveraged Foreign Exchange Trading Licence
A Type 3 license for leveraged foreign exchange trading is a license issued by the Securities and Futures Commission (SFC) of Hong Kong. This license is required for any company or individual that carries on a business of leveraged foreign exchange trading in Hong Kong, or actively markets such services to the Hong Kong public.
Key Requirements and Considerations:
1. "Fit and Proper" Criteria: The SFC's primary consideration when reviewing a license application is whether the applicant (both the company and its key personnel) is "fit and proper." This assessment involves evaluating:
Financial status and solvency: The applicant must have a sound financial position.
Qualifications and experience: Relevant educational qualifications and industry experience are crucial.
Competence, honesty, and fairness: The applicant must demonstrate these qualities in their business conduct.
Reputation and integrity: A good reputation, character, and financial integrity are essential.
2. Company Structure:
The applicant must be a company incorporated in Hong Kong or an overseas company registered with the Hong Kong Companies Registry.
3. Financial Resources:
Applicants must meet specific capital requirements under the Securities and Futures (Financial Resources) Rules (FRR). The minimum paid-up capital and liquid capital requirements can vary, but for a Type 3 license, it is generally HK$30,000,000 in paid-up capital and HK$5,000,000 in liquid capital. A lower requirement may apply if the corporation is an approved introducing agent.
4. Responsible Officers (ROs):
A licensed corporation must appoint at least two Responsible Officers to directly supervise the regulated activity.
At least one of the proposed ROs must be an executive director.
At least one RO must be available at all times to supervise the business.
ROs must also meet the "fit and proper" criteria and have the necessary competence and experience.
5. Licensed Representatives (LRs):
All personnel who carry out regulated activities on behalf of the company (and are not ROs) must be licensed as a Licensed Representative. They are also subject to the "fit and proper" requirements.
6. Compliance and Internal Controls:
Applicants must have a comprehensive business plan, robust compliance policies and procedures, and a clear organizational structure.
The SFC also expects licensed firms to have strong internal controls related to customer due diligence, client order handling, conflicts of interest, and providing information to clients.
Application Process:
The application procedure typically involves submitting a detailed application form, a business plan, compliance manuals, and other supporting documents to the SFC. The processing time can vary, but the SFC aims to process licensed corporation applications within 15 weeks.
Fees
Here are the our professional fees for obtaining a Type 3 leveraged foreign exchange trading license in Hong Kong, along with the official fees payable to the Securities and Futures Commission (SFC).
1. Bestar Professional Fees
Our fees cover a range of services necessary to navigate the complex licensing process and ensure your application is compliant. The total cost can vary significantly based on your specific needs, and the complexity of your business structure.
Application & Consultancy Package: HK$150,000 - HK$350,000
Our comprehensive service includes:
Initial consultation and eligibility assessment.
Drafting of a detailed business plan.
Preparation of all required application forms and supporting documents for the licensed corporation, Responsible Officers (ROs), and Licensed Representatives (LRs).
Developing robust compliance manuals and internal control procedures, which are crucial for meeting SFC requirements.
Guidance on corporate structuring and fulfilling the "fit and proper" criteria.
Ongoing Compliance Support: HK$10,000 - HK$30,000 per month
After your license is granted, a licensed corporation must maintain strict compliance with SFC rules. This service can include:
Assistance with monthly/semi-annual Financial Resources Returns (FRR).
Updates to compliance manuals and internal policies.
Acting as an external compliance officer.
2. Official SFC Fees (Mandatory)
These are the non-negotiable fees you pay directly to the SFC.
Application Fees (One-time)
These fees are paid when you first submit your application.
Licensed Corporation (Type 3): HK$129,730
Responsible Officer (RO): HK$2,950 per regulated activity
Licensed Representative (LR): HK$2,420 per regulated activity
Annual Fees (Recurring)
These fees are paid annually to maintain your license.
Licensed Corporation (Type 3): HK$129,730
Responsible Officer (RO): HK$5,370 per regulated activity
Licensed Representative (LR): HK$2,420 per regulated activity
How Bestar can Help
Hong Kong Type 3 Forex License
Hiring a professional firm is highly beneficial and often essential when applying for a Type 3 leveraged foreign exchange trading license from the Securities and Futures Commission (SFC) in Hong Kong. The SFC's licensing process is rigorous and requires a deep understanding of the regulatory framework. Bestar can help in the following key areas:
1. Navigating the "Fit and Proper" Requirements
The SFC's primary goal is to ensure that all applicants (both the company and its key individuals) are "fit and proper." This involves a thorough assessment of:
Financial Status and Solvency: Bestar can help you demonstrate that your firm has the necessary financial resources and capital to meet the SFC's stringent requirements.
Competence and Experience: We will review the backgrounds of your proposed Responsible Officers (ROs) and Licensed Representatives (LRs) to ensure they meet the SFC's standards for qualifications, experience, and integrity. We can also advise on any potential issues that may arise from past professional conduct or financial history.
Reputation and Integrity: Bestar can help prepare you for the SFC's due diligence, which includes background checks and a review of your firm's and key individuals' reputation.
2. Preparing a Comprehensive and Compliant Application
A well-prepared application is crucial for a smooth and timely approval. Bestar specializes in preparing all the necessary documents, which include:
Business Plan: We can help you draft a detailed and realistic business plan that aligns with the SFC's expectations and demonstrates the viability of your business model.
Compliance Manuals and Internal Controls: This is a major part of the application. Bestar can draft and implement robust compliance manuals, anti-money laundering (AML) policies, and internal control procedures that meet all relevant legal and regulatory requirements.
Forms and Supplements: We have extensive experience in completing the numerous forms and supplements required by the SFC for the corporation, its substantial shareholders, and individual applicants. A poorly prepared application can lead to significant delays or even rejection.
3. Liaising with the SFC
The application process often involves back-and-forth communication with the SFC's case officers. Bestar can act as a bridge between your firm and the regulator. We can:
Handle SFC Queries: We are skilled at responding to the SFC's inquiries and requests for additional information, which can be complex and technical.
Negotiate Licensing Conditions: In some cases, the SFC may propose specific licensing conditions. Bestar can help you negotiate these to ensure they are practical and do not unduly restrict your business operations.
4. Ongoing Compliance and Post-Licensing Support
The work doesn't end once the license is granted. Bestar can provide ongoing support to help you meet your regulatory obligations, which include:
Regulatory Filings: Assisting with the preparation and submission of regular reports, such as the Financial Resources Returns (FRR).
Policy Updates: Keeping your compliance manuals and internal policies up-to-date with the latest regulatory changes.
Training: Providing training to your staff to ensure everyone understands their responsibilities and the regulatory framework.
In summary, Bestar helps streamline the application process, minimizes the risk of rejection, and ensures your firm is set up to be compliant from day one. Our expertise can save you significant time and resources, allowing you to focus on building your business.