What is SFC and How it Came into Existence

The SFC or Securities and Futures Commission is an independent statutory body that is functional in Hong Kong. This particular government body is responsible for regulating and watching over the securities and futures market in this city. It is the SFC that is responsible for fostering orderliness and ensuring balance across these markets. It works to protect the interest of investors. It also regulates and implements various SFC compliance to help make sure that Hong Kong continues to grow financially.

It aims to transform this city into the leading international financial center of the world and make it emerge as the key financial market of China. Even though this body is said to be functional as a branch of government, it actually runs independently under law authorization related to the futures and securities.

History

This body was formed in the year 1989 in order to rectify the damage that occurred during the stock market crash of October 1987. After the Asian financial crisis that took place in 1997 the regulatory framework of SFC compliance was further improved. In 2003 SFO was implemented. It stands for Securities and Futures Ordinance (SFO). This framework further bettered and expanded the overall regulatory powers and functioning of this government body.

There are four main regulatory organizations functional in Hong Kong that work as financial regulators. SFC is one of them. This is one of the major financial centers of the world. The rest three are the Mandatory Provident Fund Schemes Authority, Office of the Commissioner of Insurance, and Hong Kong Monetary Authority. Securities and Futures Commissions oversees the activities of Hong Kong stock exchange.  

Qualities, and Knowledge a Responsible Officer Should Possess

The success of an organization depended on the inputs of its employees. Every organization hires a number of employees who specialize in their areas of operation. A responsible officer in Hong Kong needs to administer various synchronized activities of the Securities and Futures Commission (SFC). He or she will have to keep a check over different functions involving the current workflow, and operating procedures so that the organization fulfill the standards of securities and futures markets.

Apart from this, as a responsible office in Hong Kong organization, one has to implement his or her risk managing knowledge in the asset management industry to preserve and build up the inward control and fulfillment capacities for the business. To satisfy the demands of this role, one should have a good understanding of the SFC regulations that satisfy the needs of related fund type. Experience in a similar role with Nonprofessional Investors will be a plus point as one can easily understand the nature of duties, and work assigned to her or him.

The responsible officer in Hong Kong will have to administer the functioning of the company and is a challenging responsibility that can be fulfilled with hard-work, dedication, and of course proper knowledge. He will have to depend on different stuffs to establish an internal workflow that will help improve work efficiencies.

CFTC New Regulation Order Release’s Impact on SFC

The commodity futures trading commission (CFTTC) in America has recently released a regulation 30.10 order to SFC in Hong Kong that will decline the SFC license life or options traders from others following the United States registration criteria. In CFTC 30.4, an individual who asks for or accepts orders from US clients for future trading externally to the country must be registered with CFTC as future commission merchant if not excused.

It is essential to keep in mind that the exemption doesn’t include elongating to rules associated with trading in a direct or indirect manner, on United States exchanges, and does not apply to transactions in exchanges. Additionally, the exemptions also are not applicable to the licensed corporation implemented to combined oversight by HKMA and SFC, or some organization refers to oversight alone by HKMA. Regardless, the exemption for Hong Kong refers to future of the city and alternative traders and brokers a platform to contact American customers in a straightforward manner.

The rule set by CFTC allows individuals resided outside the United States to appeal for release from the criteria made in the regulation incorporating FCM registration needs. The appeal can be registered by overseas regulators for example SFC on the base of its registered companies. The release would be approved in case in the other things in the perception of the CFTC, US clients would be provided a safety level in the overseas law identical to that they would obtain in US so there is a related lawsuit platform to the United States.

Two months ago, rule 30.10 order was released that enables companies under SFC registration to deal with the customers resided in US in the direct manner about trading of future or alternatives on futures and alternative exchange related to the oversight of the SFC without being eligible to be registered with CFTC in the form of a FCM. A corporation licensed by SFC that expects to depend on this release is needed to make an application and register specific illustrations with the American national futures association by the SFC. Various overseas regulators as well as exchangers like Financial services authority in United Kingdom and Tokyo financial exchange in Japan have received the exemption in advance. The regulation order 30.10 released to SFC states that it is identified as a major regulator in the global market with firm regulatory platform and offers a place for registered companies in Hong Kong to connect with US customers in a direct manner. Find more information about the CFTC order and overseas exemption to learn about the SFC exemption.


Search online to access more information about the SFC registration and how the new release order by CFTC will have an impact on SFC licensed corporations. It is expected that the things will go smoothly. For more updates about SFC, stay connected. I will be back soon with more information on SFC. So if you are also one of the SFC registered companies, you should keep yourself updated with the new releases done by CFTC to prevent any unwanted effect as well as enjoy the lucrative and hassle-free facilities to contact with your customers. 

Facts one Should know About Setting a Company in Hong Kong

Hong Kong is an SAR (Special Administration Region) in China. It has its own judicial and legal system as well as own legislature. This region has full economic autonomy. China only takes care of foreign affairs and defense. Hong Kong independently takes part in international trading. It is also a member of Asia Pacific Economic Co-operation as well as WTO (World Trade Organizatoin).

Company incorporation in Hong Kong both for both limited and public companies is regulated by the Companies Ordinance. There are no restrictions on making foreign investments in this region. There is no investment approval procedure either. Foreign investments have full liberty to invest in nay business and have one hundred percent ownership of it. However, the ownership is limited to activities that are state-owned and few other exceptions in which the ownership cannot exceed more than 49%.

No minimum legal reserve or capital is required for company incorporation in Hong Kong. The capital investment has to be in cash which can be used towards the procurement of plants, buildings, purchasing franchise, patents, etc.  The region doesn’t impose any limitations on the amount of issue share capital or authorized capital. Also the shape capital can be in any currency. It is mandatory to get the shares registered.

One shareholder or founder is allowed to form a private company; however the total number of shareholders cannot exceed 50. Although there are no residence or nationality requirements for the board of directors and management, but the secretary of company generally needs to be a resident of Hong Kong or it should have a registered office in the region.

Do you Wish to Start a New Business in HK? Hire a Consultant...

Starting a new business is certainly not an easy decision, and comes with its own set of advantages and disadvantages. However, by utilizing a consulting service in Hong Kong, it becomes easier to decide whether to start a new business or not. Once you have decided to start a new business, there is all the possibility that you ignore the need for licenses and permits. If you fail to take care of this aspect right from the beginning, it may lead to various unprecedented issues.

You need to contact your state’s business license department to find out about getting a business license; The procedure for companies licensing and companies registry Hong Kong allows you to operate in an area. Many areas ask for a conditional-use permit in order to operate.

The best part is that there are various consulting services in Hong Kong that offer complete assistance in licensing, advisory, audit or monitoring, and likewise. For instance, if you wish to start a new business at home, such a consultancy can help you with the Business license, Company Registry, Fire Department Permit, Sign Permit, State Licenses, Federal licenses, Health Department licenses, and likewise. Also, it can help you with your business structure (sole trader; partnership; or company). It can help you in finalizing the most suitable name for your business (a name that is not in use). All in all, it helps you define a vision and set a goal for your business, and leaves no stone unturned to kick start your business...

What is Compliance - Defining Briefly!

The term due diligence and compliance are often heard in the world of business. Compliance is basically a term that explains one’s ability to act as per a standard order or set or rules and follow them. When we talk about compliance in the context of financial service then it functions on two levels:

• The first level is about complying with external set of rules that are imposed on a company
• The second level is about compliance with internal set of protocols and set of rules imposed on an organization.

What are the responsibilities, duties, and objectives of a compliance officer?

Duty of a compliance officer– A responsible compliance officer in Hong Kong will have the duty of working with staff and entire management so as to manage and identify regulatory risks.

Objective – the objective of one such officer will be to make sure that the organization for which he is working has proper internal control and adequate ways to manage and measure the risks that it might face at any time.

Responsibility – general responsibility of a compliance officer will be to offer compliance services to the organization that supports it across areas in ensuring that they are following all the relevant laws, internal procedures, and regulations.

Key functions of a responsible compliance department officer in Hong Kong.

• Identification - To recognize the present risk that company is facing as well as potential ones, and advise the organization on how to handle them.
• Prevention - to lie down and ensure implementation of control measures to safeguard the organization from those risks.
• Monitoring - To see how effectively controls are being implemented by the management against risks
• Resolutions and advisory – to resolve any difficulties and to offer advice about rules and control.

The requisites to get a non permanent license from SFC Hong Kong

If a company that is established and is run on foreign investments does not have any business associates in Hong Kong and is looking forward to continue SFC controlled activities in the city for a short-term, it will be required to apply for a non-permanent license from the Companies Registry Hong Kong. A non permanent license holder may only continue to deal in one or a set of the activities mentioned below.

1. Type 1 - trade in securities
2. Type 2 - trade in upcoming contracts
3. Type 4 - giving counseling on securities
4. Type 5 - giving counseling on future and upcoming contracts
5. Type 6 - giving counseling on corporate finance

The non permanent license holder is also prohibited from keeping client assets while pursuing the above mentioned activities. Another requisite for applying non permanent license is that the applicant enterprise or organization must have their business registered in Hong Kong. This implies that the applicant party must set up an official branch of their organization or an auxiliary company in Hong Kong. A representative office cannot fulfill this requisite for the application of temporary license as it cannot manage or carry out any business activity on its own in Hong Kong.