Licensed corporations, licensed representatives (including responsible officers) and registered institutions must remain fit and proper at all times. They have to comply with all applicable provisions of the SFO and its subsidiary legislation as well as the codes and guidelines issued by the SFC.  This page highlights certain ongoing statutory obligations imposed on licensed corporations, licensed individuals, registered institutions and associated entities of intermediaries. 

For licensed corporations and registered institutions, you should exhibit your licence or certificate of registration in a prominent place (such as the client reception area) at your principal place of business.  If you have more than one place of business, a certified copy of your licence or certificate must be exhibited in a prominent place at each of your other places of business (section 3 of the Securities and Futures (Miscellaneous) Rules).

If your place of business consists of more than one floor in the same building, it may not be necessary to display your licence or certificate at each of the floors if all the floors share a common client reception area and your licence or certificate is displayed therein. 

The SFO requires that there must be at least one responsible officer available at all times to supervise the licensed corporation’s business of carrying on a regulated activity. If all responsible officers are out of Hong Kong on a business trip or on leave, the licensed corporation complies with such requirement so long as the responsible officer(s) can be contacted (preferably by telephone) whenever necessary and proper internal controls are in place. However, this should be regarded as an interim measure only and the out of town period of the responsible officers should be reasonable for the proper discharge of their duties.

Given the broader clientele coverage, the complexity of the business activities undertaken, and the need to have day-to-day dealings and communications with the exchanges, the SFC generally expects that an exchange participant of The Stock Exchange of Hong Kong Limited or Hong Kong Futures Exchange Limited to have at least two responsible officers locally available at all times to directly supervise its brokerage business.

The SFO provides that a licensed corporation shall not carry on any regulated activity for which it is licensed unless it has two Responsible Officers, with at least one of whom shall be an executive director of the licensed corporation, in relation to the regulated activity.

Licensed corporations

Registered institutions

Apart from notifying the SFC of any intended cessation of business, licensed persons and registered institutions are required to notify the SFC through WINGS-LIC of certain changes in the information that they have provided to the SFC in their initial applications.  In the case of registered institutions, the notification should be made to both the SFC and the HKMA.  

The changes requiring notification by licensed persons and registered institutions are specified in section 135 of the SFO and Parts 1 to 3 of Schedule 3 to the Securities and Futures (Licensing and Registration) (Information) Rules.  

In the case of entities belonging to the same group of companies, a licensed corporation or registered institution may make a notification on its behalf and on behalf of other group entities in respect of the same change. The notification should state clearly on whose behalf it is made, and the represented entities should be aware of the notification. 

For reference, please see “Circular to Intermediaries Regarding Compliance with Notification Requirements”.

A director of a licensed corporation is required to notify the SFC of his/her becoming or ceasing to be a director of the corporation within 7 business days after the event takes place (section 135(6) of the SFO).

A substantial shareholder of a licensed corporation is required to notify the SFC of changes in his/her particulars as detailed in Part 4 of Schedule 3 to the Securities and Futures (Licensing and Registration) (Information) Rules. 

For reference, please see “Circular to Intermediaries Regarding Compliance with Notification Requirements”.

An associated entity of an intermediary is required to notify the SFC within 7 business days of its becoming an associated entity and ceasing to be an associated entity (section 165 of the SFO). The particulars required for notification are set out in sections 3 and 4 of the Securities and Futures (Associated Entities – Notice) Rules.  Where there is any change in the particulars notified, the associated entity shall within 7 business days thereafter notify the SFC of such change through WINGS-LIC.

An associated entity is also required to notify the SFC of its financial year end within one month after becoming an associated entity (section 155(1)(b) of the SFO).  This requirement does not apply to an associated entity which is an authorized financial institution.

Some of the more common change events that require notification are shown in the table below.  For details of the notification requirements, you should refer to relevant provisions of the SFO (e.g. sections 123 and 135) and the Securities and Futures (Licensing and Registration) (Information) Rules.  All notifications must be made through WINGS-LIC.

Licensed corporations and associated entities of intermediaries (except those which are authorized financial institutions) are required to submit their audited accounts and other required documents within four months after the end of each financial year (section 156(1) of the SFO).

If a licensed corporation ceases carrying on all of the regulated activities for which it is licensed, it should submit to the SFC its audited accounts and other required documents, made up to the date of cessation, not later than four months after the date of the cessation.  The same requirement applies to an associated entity (which is not an authorized financial institution) of an intermediary upon its ceasing to be an associated entity of the intermediary (section 156(2) of the SFO).

Licensed corporations are required to submit monthly financial resources returns to the SFC. However, corporations that are licensed only for Type 4, Type 5, Type 6, Type 9 and/or Type 10 regulated activities and whose licences are subject to the condition that they shall not hold client assets, are only required to submit semi-annual financial resources returns (section 56 of the Securities and Futures (Financial Resources) Rules).  

Except if the SFC has announced a waiver of the annual licensing fees for a particular period, all licensed persons and registered institutions should pay annual fees within one month after each anniversary date of their licences or registrations (section 138(2) of the SFO).  The annual fee amounts are shown in the table below. 

Licensed corporations and licensed individuals are required to submit annual returns to the SFC through WINGS-LIC within one month after each anniversary date of their licences (section 138(4) of the SFO).

Failure to submit annual return before the due date could result in suspension and revocation of the licence (sections 195(4)(b) and (6) of the SFO). Details are set out in the table below.

Licensed corporations and registered institutions are primarily responsible for planning and implementing a continuous education programme best suited to the training needs of the licensed representatives or relevant individuals they engage. Such programmes should enhance the individuals’ industry knowledge, skills and professionalism. The firms should perform due diligence to ensure CPT compliance by the individuals they engage.

Licensed individuals and relevant individuals of registered institutions are required to complete 10 CPT hours per calendar year, regardless of the number and types of regulated activities he or she engages in. Five of these 10 CPT hours must be on topics directly relevant to the regulated activities for which he or she is licensed at the time the CPT hours are undertaken.

Individuals who engage in the sponsor work or Codes on Takeovers transaction work for a firm are required to attend 2.5 CPT hours per calendar year on topics that are relevant to their sponsor work or Codes on Takeovers advisory work.

In view of the higher level of responsibility and accountability placed on Responsible officers and Executive Officers, they are required to take two additional CPT hours per calendar year on regulatory compliance.

Within the 12 months after a person first becomes a licensed individual or relevant individuals, he or she must undertake two CPT hours on ethics. Thereafter, that person is required to complete two CPT hours per calendar year on topics relating to either ethics or compliance.

Details of CPT requirements for corporations and individuals are set out in paragraphs 4 and 5 of the “Guidelines on Continuous Professional Training”.

In terms of the content, please refer to paragraphs 7.1 and 7.2 of the "Guidelines on Continuous Professional Training" for examples relevant to each level.  The important point to note is that the training topics must be relevant to the functions to be performed by the person.

Further to paragraph 6.2 of the "Guidelines on Continuous Professional Training", the taking of online courses will be considered as self-study. Provided that there are independent assessments, such as evaluation or test results, and sufficient records to demonstrate fulfilment and duration of training, they can be counted towards acceptable CPT activities.  Those online courses have to be of relevance to the licensees’ functions.

Licensed corporations and registered institutions should keep sufficient records on the programmes and the CPT activities undertaken by the individuals for a minimum of three years and be made available for inspection upon request by the SFC or the HKMA. Individuals should also retain their own CPT compliance records for a minimum of three years. For details, please refer to paragraph 4 of the “Guidelines on Continuous Professional Training”. 

Licensed corporations and individuals are required to confirm (when submitting their annual returns through WINGS-LIC) whether they have complied with the relevant CPT requirements for the previous calendar year.

Please note that you are not required to attend courses offered by the approved CPT providers to fulfil CPT requirements. A CPT provider approved by the SFC is just one option.

Intermediaries are required to notify the SFC of its engagement in trading and asset management services involving virtual assets as well as robo-advisory financial services. Also, intermediaries are advised to discuss such activities with the SFC before the relevant business is conducted in Hong Kong by the intermediaries or their group entities. Please refer to Do you need a licence or registration? > Further guidance > Financial technology (Fintech) for further information.

See also “Circular to intermediaries on compliance with notification requirements”

Further to Types of intermediary and licensed individual > Registered institutions > Further guidance and according to Q14 of the frequently asked questions concerning “Management Accountability at Registered Institutions”, registered institutions should submit updates on the relevant information and the organisation chart to the HKMA and the SFC within 14 days of the relevant change taking effect.