Hong Kong SFC licensing and compliance hints – April 2023

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Authored by: Jennifer Baccanello

Reminder to private equity firms of the SFC’s stance on licensing

In the SFC’s Circular to private equity firms seeking to be licensed (Circular) dated 7 January 2020, it was made clear that depending on the business activities of private equity (PE) firms, they may be required to be licensed by the Securities and Futures Commission (SFC) (link to our analysis of the Circular).

The SFC’s recently published Quick Reference Guide to Licensing Requirements for PE firms provides useful and simplified information on the typical licences required for PE firms and explains issues relating to co-investment activities, incidental exemptions, as well as the approach that the SFC takes when deciding whether an individual meets the competency requirements to become licensed as a responsible officer.

If you are operating a PE firm, our dedicating licensing and compliance team can assist you by:

• assessing your current business activities and determining whether any of the licensing exemptions apply;

• if you are not required to be licensed, providing advice on how to operate in a way that will ensure you are not in breach of the regulatory requirements;

• if you are required to be licensed:
  • preparing a comprehensive licensing application to the SFC;
  • drafting policies and procedures covering your regulated business activities; and
  • assisting with ongoing regulatory and compliance support.

Waiver of annual licensing fees

Annual licensing fees for intermediaries and licensed individuals have been waived by the SFC for the period 1 April 2023 to 31 March 2024.