According to a special code of conduct, all licensed individuals in HK SAR are expected to provide financial services exclusively in compliance with the mentioned code. In order for the services providers to obtain the corresponding license, they need to send an application to the SFC. This regulator in HK is responsible for granting financial licenses and controlling the financial market of HK.
Another tool – HKMA-developed guidance – delivers complete information about the requirements for banking institutions. Moreover, it has its own code of conduct that describes the standards for banking establishments and their workers.
How to obtain a broker license in HK
SFC issues the rules and guidelines that companies who operate with futures and securities must comply with. Companies like this have to employ a minimum of one worker for each activity the company is licensed for, as the SFO states. This employee is responsible for supervising the operations executed by the company as well as make sure all relevant regulations are fulfilled.
All mentioned conditions apply to bank institutions that have obtained their license for operating with futures and securities. Since banks’ directors and officers are supposed to monitor regulatory compliance, the SFC relies on them.
Senior management responsibilities in financial services
The senior officials of a bank are the ones responsible in case of violations while providing financial services in KH SAR. The SFO states that no matter how small the institution is the SFC has a right to seek an injunction against them if the law is violated. The directors of the licensed company can be subject to SFC’s disciplinary action, once it is confirmed that the activities of the financial services providers were unlawful.
A civil claim can be filed against certain directors by SFC, for example for not disclosing needed information in time. Directors have personal responsibility for their firms and cases mentioned earlier show it perfectly. Since the directors are expected to ensure that the company’s management complies with all the regulations, it is necessary for them to be knowledgeable enough before obtaining a broker license in HK.
Compliance with the standards of communication with costumers is one of the requirements issued by SFC for license applicants. Other conditions include complying with standards related to the execution and conclusion of contracts.
For SFC-authorized banks, the regulator has published the Code of Practice, also recommended following. The Code fulfillment is not obligatory for obtaining license permitting provisions of financial service in HK though its containment is very similar to the official requirements. Among many other aspects, recommendations are related to:
- Card-related services
- Account management
- Payment services and e-banking.
The Code’s main idea is to focus on treating customers fairly and reflecting the regulator’s policy toward vulnerable parties.
It is worth mentioning that the financial sector in Hong Kong is regulated quite tightly. Therefore, there are many requirements and conditions to fulfill in order to get a financial services license. If you are planning on doing so but still do not feel confident, COREDO’s specialists are prepared to consult you professionally about all questions and regulatory frameworks in HK SAR.