There are 12 forms in the Financial Return.  A licensed corporation which is required to submit monthly financial return does not need to submit a separate set on a semi-annual basis.

Please note that Forms 10 to 12 of the Financial Return are to be submitted only on a quarterly basis (for the quarters ended March, June, September and December) and are to be submitted together with other forms due on a monthly basis.

Section reference: General

Yes.  Please refer to section 56(4) of the Securities and Futures (Financial Resources) Rules for details.  Yet, please be reminded that the submission deadline remains the same (i.e. no later than 3 weeks after the month concerned) even though the return is made up to the licensed corporation’s own fiscal period.

Section reference: General

A licensed corporation is obliged to comply with all requirements under the Securities and Futures (Financial Resources) Rules (including submission of financial return at a specified interval) as long as it is still licensed with the Commission (that is, until revocation of its licence).  

Section reference: General

The Excel template of the latest financial return form is available for download from the SFC’s website. 

While a licensed corporation normally completes its Financial Return (including Form 3) based on its internal ledgers and records, it is obliged to perform regular reconciliation of the firm's internal ledgers and records to those issued by third parties, i.e. banks, counterparties and custodians, and to ensure that its internal ledgers and records are regularly updated and free of material errors or omissions in order to properly reflect its financial position. Such reconciliations should be checked/reviewed and approved by appropriate senior staff member(s) of the firm on a regular basis.

Section reference: Form 3

No.  Rolling balance cash clients analysis is only applicable for a licensed corporation who has elected to report its amounts receivable from cash clients on set-off basis as provided in section 21(2) of the Securities and Futures (Financial Resources) Rules.

A licensed corporation providing securities margin financing should report the required information in Form 4 in respect of its securities margin financing business.

Section reference: Form 6

Since the front end load charges are derived from transactions executed on behalf of clients, they constitute commission in substance and thus these charges should be included as commission income. 

Section reference: Form 7

Client securities held in the entitlement account of CCASS can be reported in Cell 8013 (Form 8 Table 1) with appropriate description.

Section reference: Form 8 Table 1

Client securities deposited in safe custody with overseas securities dealers can be reported under cell 8021E (“Outside Hong Kong - Deposited in safe custody in accounts maintained with overseas securities or futures dealers).

With reference to section 4(3)(a)(ii) and section 5(1)(d) of the Securities and Futures (Client Money) Rules ("Rules"), the amounts deposited with any recognized clearing house for meeting the client's obligations to meet settlement or margin requirements in respect of dealing in securities or futures contracts carried out by the licensed corporation on behalf of the client are not required to be segregated for the purpose of the Rules.  

We do not envisage any deficiency in segregated funds as reported in Cell 8124 would have any impact on the computation of liquid capital position.

Section reference: Form 8 Table 2