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Reminders on licence revocation for SFC Licensed Corporations

A Licensed Corporation (LC) which intends to cease business must continue to comply with various obligations under the Securities and Futures Ordinance (SFO) during the period between notification to the SFC of its intention to cease business and revocation of its licence.

After the LC ceases to conduct regulated activities (cessation date), it is required to maintain an RO being answerable to the SFC until its licence is revoked and must continue to comply with notification requirements under the SFO. The LC must keep its business records in a place known to the SFC for 7 years unless specified otherwise. The LC must nominate someone as SFC contact person for queries post licence revocation. The contact person should be familiar with the LC’s business (as well as easily reachable by the SFC) and cannot cease to be accountable without appointing another person for this purpose. During the period between the cessation date and licence revocation date, the LC will need to continue to comply with all ongoing obligations including submission of FRR returns, daily monitoring of liquid capital position, filing notifications, and seeking the SFC’s prior approval for certain changes (such as substantial shareholders, record keeping address, changes of directors etc.).

Within 4 months after the cessation date, the LC is required to file audited cessation accounts made up to (and including) the cessation date with the SFC. The sooner the LC files the audited cessation accounts, the sooner the SFC can revoke the LC’s licence. The LC will also need to ensure that all client accounts have been closed (or effectively transferred).

The LC can only commence the process of liquidation after its licence has been revoked by the SFC.

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