Based on the latest 2025 version of SFC's "Dealing Manual"

Hong Kong Type 8 License
Securities margin financing

Complete Guide to Application and Acquisition

This comprehensive analysis covers the application requirements, core processes, capital requirements, and acquisition pathways for Type 8 Regulated Activities (RA8) under the Hong Kong Securities and Futures Commission (SFC). Compiled by the AIYING professional team based on official SFC documents, this guide helps you obtain your license efficiently.

SFC official data

Based on the Dealing Manual

Reference period

About 5-6 months

Minimum capital

Starting from HK$1,000 million

Section 1

What is a Type 8 license (securities margin financing)?

Understand the legal definition, core business scope, and applicable entities of Type 8 regulated activities of the Hong Kong Securities and Futures Commission.

The Hong Kong Securities and Futures Commission (SFC) classifies "Securities Margin Financing" as a Regulated Activity Type 8 (RA8). Corporations holding this license can legally provide clients with financial support for acquiring or holding securities listed on the Hong Kong Stock Exchange, commonly known as "margin financing."

This license is governed by the Securities and Futures Ordinance (SFO) and its subsidiary legislation, and applicants must meet stringent capital requirements, personnel qualifications, and compliance standards. In practice, Type 8 licenses are often applied for in combination with Type 1 licenses (securities trading) to conduct both brokerage and financing business simultaneously.

Legal Definition

According to Schedule 5, Type 8 of the Securities and Futures Ordinance, securities margin financing means providing financial support to any person for the purpose of acquiring or holding listed securities.

Core Business

Offer margin loans to clients, enabling them to leverage their investments in or hold securities listed on the Hong Kong Stock Exchange.

Common licensed entities

Securities brokerage firms, bank subsidiaries, and independent finance companies. Typically held in combination with a Type 1 license (securities trading).

important hint

Only financing for the acquisition or holding of listed securities falls under Category 8 regulated activities. Financing for unlisted securities is not included in this category.

Latest policy update for 2026 / February 11, 2026

New regulations for virtual asset margin financing: The SFC has issued a circular allowing corporations holding Type 8 licenses to provide virtual asset financing to their margin clients. This is the latest phase in the SFC ASPIRe roadmap, marking a significant expansion of the scope of business for Type 8 licenses.

Collateral restrictions: BTC and ETH only

Prudent deduction rate: no less than 60%

Prerequisite: The customer must already be an SMF customer.

Quick Reference

Regulated activity number

Common combinations

RA8 (Class 8)

Category 1 + Category 8

Legal basis

Suitable

Schedule 5 of the Securities and Futures Ordinance

Securities brokerage firms, finance companies, and bank subsidiaries

regulatory agency

俗稱

The Securities and Futures Commission (SFC) of Hong Kong

Margin Financing License

View SFC's official card dealing instructions

Section Two

What businesses are covered by license plate number 8? How do I choose the application path?

Gain a deeper understanding of the specific business scope and activity boundaries of Type 8 licenses, as well as the four different licensing paths and their respective requirements.

Key point: License plate number 8 is a unified license plate; there is no distinction between "large" and "small" plates.

Unlike Type 1 (securities trading) licenses, Type 8 licenses are a unified, non-divisible license. With a Type 8 license, you can conduct all securities margin financing activities without needing to apply separately for different functions such as "trading rights" and "settlement rights" as with Type 1 licenses.

The four business functions listed below (margin lending, securities pledging, account management, and liquidation) are different operational steps under the same license, not subcategories that require separate applications. Obtaining a Type 8 license automatically covers all functions.

Why doesn't plate number 8 have a distinction between "big" and "small" plates? (Comparison with plate number 1)

Comparison Reference

License Plate 1 (Securities Trading) – with functional subdivisions

License No. 1 covers a very wide range of businesses (stock trading, bond trading, fund placement, underwriting, etc.), hence the industry commonly refers to it as "Big License No. 1" and "Small License No. 1".

Small 1 Referrals/commissions are permitted, but holding client assets is prohibited. Capital requirement is approximately HK$50.

Large 1 You can hold client assets, open accounts, and execute trades; capital requirement starts from HK$300 million.

Big 1+ Trading Rights Direct connection to the Hong Kong Stock Exchange requires an additional HK$3,000 million margin deposit + HK$50 application fee.

This license

Type 8 License (Securities Margin Financing) — Uniform License

The legal definition of License Plate 8 is very focused and singular: "Providing financial facilities to facilitate the acquisition or continued holding of listed securities." This definition itself constitutes a complete and indivisible business activity.

✓ Obtaining license plate number 8 = Covering all SMF business functions

✓ No need to select sub-functions such as "trading rights" or "settlement rights"

✓ There is no distinction between "large 8 license plate" and "small 8 license plate".

🛈 The differences in conditions stem from the different licensing pathways, rather than the functional specialization of the licenses themselves.

The four core business functions of a licensed corporation holding a No. 8 license

After obtaining License No. 8, the licensed corporation can perform all of the following business functions. These are different operational steps under the same license, and each function has corresponding SFC compliance guidelines:

Leveraged financing is provided to clients using their listed stocks as collateral, enabling them to purchase more securities with a small amount of their own funds.

Practical example: A client wants to buy stocks with a market value of HK$50. With a margin ratio of 40%, the client only needs to pay HK$20 out of pocket, and the remaining HK$30 will be financed by a licensed corporation.

Compliance requirements: Must comply with the total margin lending cap (Guidelines Chapter 1).

Open and manage margin accounts for clients, setting key parameters such as initial margin ratio, maintenance margin ratio, and haircut.

Practical example: Set differentiated haircuts based on the liquidity and volatility of different securities: 30% for blue-chip stocks, 50% for small and medium-sized stocks, and 70% for highly volatile stocks.

Compliance requirements: Must comply with customer credit limit controls (Chapter 2 of the Guidelines).

We accept listed securities already held by our clients as collateral to provide them with financing. Clients can use the funds raised to continue holding the securities or for other purposes.

Practical example: A client holds blue-chip stocks worth HK$100 million and obtains a financing amount of HK$60-70 at a discount after pledging them.

Compliance requirements: Must comply with securities collateral concentration controls (Chapter 3 of the Guidelines).

When the value of the collateral falls and triggers the margin maintenance threshold, a margin call is issued to the client; if the client fails to replenish the margin in time, forced liquidation is executed.

Practical example: The maintenance margin ratio is set at 140%. When the account margin ratio falls below 140%, a Margin Call is triggered, and when it falls below 120%, forced liquidation is initiated.

Compliance requirements: Must comply with the guidelines on foreclosure and forced liquidation (Chapter 6 of the Guidelines).

Clarification of Common Misconceptions

Misconception: "When applying for a No. 8 license plate, you need to select different service functions and apply separately, just like with a No. 1 license plate."
Fact: License plate number 8 is a unified license plate. When applying, it is not necessary to select sub-functions such as "make margin loans" or "make securities pledges". Once approved, all securities margin financing activities can be carried out.

Misconception: "Different business functions correspond to different application conditions and capital requirements"
Fact: The difference in application requirements stems from the different licensing pathways (standalone No. 8 license vs. 1+8 combination vs. No. 1 license with exemption), not from differences in business functions. Regardless of the pathway, the scope of business functions after obtaining a No. 8 license is exactly the same.

Misconception: "Like card number 1, card number 8 has different ranks."
Fact: Type 1 licenses are divided into large and small licenses due to their broad business scope (stocks, bonds, funds, underwriting, etc.). Type 8 licenses have a very focused business definition (limited to securities margin financing), therefore they do not have, and do not need to have, further functional subdivisions.

Activities (business boundaries) not covered by license plate number 8

The following activities are not covered under Category 8 regulated activities. To conduct these activities, you may need to apply for other types of licenses or undergo a separate compliance assessment:

Short selling/borrowing shares

Lending securities to clients for short selling constitutes a complex compliance structure and is not within the scope of Category 8 core regulations.

IPO Loans

The SFC's "Guidelines on Securities Margin Financing Activities" explicitly excludes IPO loans from its scope of application.

Unlisted securities financing

Category 8 only covers securities listed on the securities market; financing of unlisted securities is not covered by RA8.

Private loans / general lending

General loans not secured by securities are not classified as Category 8 regulated activities.

Disguised margin trading

Financing arrangements disguised as investments are strictly prohibited by the SFC and may trigger enforcement action.

Comparison of four licensing paths: Differences in conditions stem from the path itself, not business function.

While Type 8 licenses themselves do not have functional subdivisions, there are four pathways to obtaining one, each with different application requirements, capital requirements, and business scope. The choice of which pathway to take depends on your business model and existing licensing status.

Independent Type 8 pure financing company model

Suitable for: Independent finance companies, professional financing institutions,Market Prevalence: Rare

Holding only a Type 8 license, focusing on securities margin financing business. Does not execute securities transactions; clients' buy and sell instructions must be fulfilled through other licensed brokers.

Paid-up share capital

Paid-up share capital >= HK$1,000 million

Liquidity

Working capital >= HK$300 million

Responsible Personnel (RO)

>= 2 ROs (Class 8)

Exam Requirements

HKSI Paper 1 + Paper 8

Securities transactions cannot be executed directly; they must be conducted through other licensed securities firms.

Important tips:In practice, this is less common because clients usually need brokerage firms to execute trading instructions when buying and selling securities.

License Plate No. 1 + License Plate No. 8: Brokerage + Financing Combination Model

Suitable for: Securities brokerage firms, full-license securities companies,Market Presence: Most Common

Holding both Type 1 (Securities Trading) and Type 8 (Securities Margin Financing) licenses allows one to conduct both brokerage and margin financing business simultaneously, which is the most common combination in the market.

Paid-up share capital

Paid-up share capital >= HK$1,000 million (both categories combined)

Liquidity

Working capital >= HK$300 million

Responsible Personnel (RO)

Each type of activity requires at least 2 ROs (who can hold multiple positions).

Exam Requirements

HKSI Paper 1 + Paper 7 + Paper 8

Can directly execute securities transactions for clients

Key points:The most flexible model allows clients to execute trades and provide financing simultaneously.

License plate No. 1 comes with an exemption; no separate application for license plate No. 8 is required.

Suitable for: Securities firms that already hold a Type 1 license and wish to expand their financing business.Market Presence: Common

Corporations already holding a Type 1 license can provide securities margin financing to their clients without needing to apply for a separate Type 8 license. However, they will be subject to stricter financial resource requirements.

Paid-up share capital

Higher requirements must be met to fully pay up share capital (due to the provision of an SMF).

Liquidity

The working capital requirements will be increased accordingly.

Responsible Personnel (RO)

Continue using the RO configuration of license plate number 1

Exam Requirements

Original No. 1 license plate test requirements

Can directly execute securities transactions for clients

Important tips:Similar to the concept of a "high-end" license plate (like the No. 1 license plate) – the same license, but with a higher capital threshold triggered by engaging in financing activities.

Banks (accredited financial institutions) do not need to apply for a No. 8 license.

Suitable for: Licensed banks, accredited financial institutions; Market prevalence: Not applicable

According to the SFC's Licensing Manual, accredited financial institutions (i.e., banks) are not required to register for Type 8 regulated activities and can directly conduct securities margin financing business.

Paid-up share capital

Subject to HKMA bank capital requirements regulation

Liquidity

Subject to HKMA liquidity requirements regulation

Responsible Personnel (RO)

Subject to HKMA personnel's supervision

Exam Requirements

Subject to HKMA training requirements and supervision

Can directly execute securities transactions for clients

Important tips:Banks are regulated by the Hong Kong Monetary Authority (HKMA) and are not subject to licensing by the SFC.

Contrast Dimensions Independent No. 8 license plate 1+8 license plate combination License Plate No. 1 comes with an exemption bank
You need to apply for license plate number 8. need need No need No need
Executable transactions Improper can can can
SMF Business Scope All SMF functions All SMF functions All SMF functions All SMF functions
Paid-up share capital ≥ HK$1,000 million ≥ HK$1,000 million Higher requirements Regulated by HKMA
RO requirements ≥ 2 people (RA8) ≥ 2 people per category Continue using license plate number 1 Regulated by HKMA
HKSI Exam Paper 1 + 8 Test Paper 1 + 7 + 8 Original No. 1 license plate requirements Regulated by HKMA
Suitable for the main body Independent Finance Company Securities brokerage firms Securities firms that already hold license number 1 Licensed banks
Market commonality less Most common common not applicable
Section 3

What conditions need to be met to apply for a Class 8 license?

A comprehensive understanding of SFC approval standards, from personnel qualifications and examination requirements to company structure and compliance system.

Qualification requirements for responsible personnel

For each type of regulated activity, at least two responsible officers must be appointed, and at least one of them must be an executive director.

Minimum number of people

At least 2 ROs for each type of regulated activity

Management requirements

At least one RO must be an executive director of the licensed corporation.

Industry experience

At least 3 years of relevant industry experience (securities financing/credit management)

Management experience

Management experience with at least supervisory functions

competence

An evaluation by the appropriate candidate (Fit and Proper) of the SFC is required.

Local Hong Kong

ROs must be based in Hong Kong and be able to effectively oversee daily operations.

Hong Kong Securities and Investment Institute (HKSI) Examination Requirements

All responsible personnel and licensed representatives must pass the relevant qualification examination before they can obtain SFC approval.

Paper 1

Basic Securities and Futures Regulations (mandatory for all regulated activities)

Paper 8

Securities Margin Financing Regulations (Type 8 Specific Examination Paper)

Exemption conditions

Those with relevant academic qualifications or professional certifications may apply for partial exemption.

Exam language

Chinese or English

Validity period

The license application must be completed within 3 years after approval.

Continuous training

At least 5 hours of Continuing Professional Training (CPT) must be completed annually.

Company Structure and Governance Requirements

The applicant corporation must be a company incorporated in Hong Kong and have established a sound corporate governance structure.

Company registration

It must be a limited company incorporated in Hong Kong.

Registered Office

Must have a physical office address in Hong Kong

Board of Directors

A board of directors must be established, including at least one executive director and RO.

Compliance Officer

A compliance officer must be appointed.

Auditor

An external auditor must be appointed to conduct an annual audit.

Company Secretary

A qualified company secretary must be appointed.

Internal monitoring and compliance system requirements

SFC requires applicants to establish a comprehensive internal control system covering risk management, AML/CFT, and client asset protection.

AML/CFT

Establish comprehensive anti-money laundering and counter-terrorism financing policies and procedures.

Risk Management

Establish a credit risk assessment and margin call mechanism

Customer assets

Client assets must be strictly segregated from company assets.

KYC procedures

Establish customer identification and due diligence procedures

Business continuation

Develop a Business Continuity Plan (BCP) and Disaster Recovery Plan.

record keeping

All transaction records must be kept for at least 7 years.

Self-Assessment Checklist for Applicants

Before formally submitting your application, please confirm that the following key conditions have been met:

  • Our company has been incorporated in Hong Kong.
  • The responsible personnel have passed or plan to pass HKSI Paper 1 and Paper 8.
  • An AML/CFT policy framework has been established.
  • An external auditor has been arranged.
  • Funds have been prepared to meet the minimum paid-up share capital requirements.
  • At least two qualified personnel have been identified as responsible.
  • The candidate for compliance officer has been selected.
  • A physical office address has been established in Hong Kong.
Section Four

What is the application process for a Class 8 license?

From initial preparation to approved operation, understand the complete application timeline and key tasks at each stage.

5-6

Months (new application)

3-4

Months (acquisition path)

15

Zhou (SFC approved)

Target screening

Phase 1
4-8 weeks

➜ Registered limited company in Hong Kong (if not yet registered)

➜ Building a compliance framework: AML/CFT policies, internal control manual

➜ Preparing the office and IT infrastructure

➜ Identify and recruit qualified Resource Owners (ROs).

➜ Appoint external auditors and compliance advisors

Personnel Qualification

Phase 2
2–4 weeks

➜ The person in charge registered and passed HKSI Paper 1 and Paper 8.

➜ Confirm that the RO meets the SFC's Fit and Proper criteria.

➜ Prepare a detailed resume and proof of work experience for the RO position.

➜ Arrange for ROs to sign employment contracts with licensed corporations

Material preparation

Phase Three
2–4 weeks

➜ Fill out the license application form (via the WINGS online system).

➜ Preparation of financial forecasts and capital adequacy certificates

➜ Prepare a business plan.

➜ Complete the internal control manual and compliance policy documents.

➜ Prepare legal documents such as the company's articles of association and board resolutions.

Submit application

Phase Four
Approximately 1 weeks

➜ Submit all application materials through the SFC WINGS online system

➜ Pay the responsible personnel approval fee (HK$2,950 per RO per type of activity)

➜ License application fee (HK$4,740 per type of regulated activity)

➜ Confirm all files are complete and error-free.

SFC Approval

Phase 5
Approximately 15 weeks

➜ The SFC will conduct a preliminary review and may request supplementary information.

➜ SFC Assessment Company's Compliance Structure and Internal Controls

➜ SFC will interview the responsible personnel (if applicable).

➜ SFC makes a decision to approve or reject.

Approved to operate

Phase Six
1-2 weeks

➜ Pay the first year's license fee

➜ Register in the SFC Public Register

➜ Any additional conditions required by SFC

➜ Formal commencement of Category 8 regulated activities

prompt:The above stages can be partially carried out in parallel. For example, while preparing application materials, the responsible personnel can simultaneously register for the HKSI exam. If the acquisition of a licensed company is chosen, the first three stages can be significantly shortened, with the overall cycle taking approximately 3-4 months. The SFC's approval time is approximately 15 weeks according to its service commitment, but the actual time depends on the completeness of the application materials.

Section Five

How much does it cost to apply for a Class 8 license?

Transparently presenting all official fees, capital requirements, and ongoing operating costs helps you with your financial planning.

Expense items Amount (HK$) Explain
License application fee 4,740 Each type of regulated activity, one-time
Personnel approval fee 2,950 Every RO, every type of regulated activity
Annual license fee (corporation) 4,740/year Each type of regulated activity
Annual License Fee (RO) 4,740/year Every RO, every type of regulated activity
Annual license fee (licensed representative) 1,790/year Each licensed representative, each type of regulated activity

Data source: SFC official fee schedule and the Securities and Futures (Fee) Rules. Fees may be adjusted according to regulatory policies; please refer to the latest SFC announcements for the most accurate information.

Example of cost estimation: Applying for only a Class 8 license (2 ROs)

License application fee

HK$4,740 x 1 = HK$4,740

RO Approval Fee

HK$2,950 x 2 = HK$5,900

First year license fee (corporation)

HK$4,740 x 1 = HK$4,740

First year license fee (RO)

HK$4,740 x 2 = HK$9,480

Total official SFC fees in the first year

HK$24,860

* The above are only the fees charged by SFC and do not include consulting fees, office rent, IT system and other operating costs.

situation Minimum Paid-up Capital Minimum quick capital
Type 8 license only HK$10,000,000 HK$3,000,000
Category 1 + Category 8 combination (does not hold client assets) HK$10,000,000 HK$3,000,000
Category 1 + Category 8 combination (holding client assets) HK$10,000,000 HK$3,000,000

Source: Securities and Futures (Financial Resources) Rules (cap. 571N). The minimum paid-up capital for Type 8 licenses is a uniform HK$1,000 million, regardless of whether client assets are held. Liquid funds must be continuously maintained and must not fall below the prescribed level.

注意：SFC已於2025年4月起恢復收取年度牌照費（此前已連續豁免數年）。 法團年度牌照費為HK$5,340，持牌代表為HK$1,790，負責人員為HK$3,550。 請在費用預算中納入此項年度經常性開支。

What is full payment of share capital?

Paid-up share capital refers to the total amount of capital contributions actually received by the company from its shareholders. This is a basic threshold for the SFC to assess the financial strength of licensed corporations and must be met at the time of application.

What is quick capital?

Liquid capital refers to a company's net current assets minus its current liabilities. This is a key indicator used by the SFC to measure the short-term solvency of licensed corporations and must be consistently maintained above the prescribed level.

Continuous cost items Estimated amount/frequency Explain
Annual license fee See application fee schedule Payment must be made on time each year.
Annual audit fee HK$50,000–200,000+ Depending on the scale of the business
Compliance personnel compensation HK$30,000–80,000/month Compliance Manager and Team
RO Compensation HK$50,000–150,000+/month Each person in charge
Office space rent Depending on the location A physical office address must be established in Hong Kong.
IT system maintenance HK$10,000–50,000/month Trading systems, risk control systems, etc.
Professional Insurance HK$20,000–100,000/year Professional liability insurance (PI Insurance)
Continuing training fees HK$5,000–20,000/year CPT fee per licensee

The above ongoing costs are market reference estimates; actual amounts vary depending on company size, business scope, and market conditions. Detailed financial planning is recommended before applying.

Section Six

New application vs. acquisition of licensed company

Both pathways to obtaining a Class 8 license have their advantages and disadvantages; choose the optimal option based on your specific circumstances.

New application

Applying for a Class 8 license from scratch

✓ The company has a clean history and no legacy compliance risks.
✓ A compliance framework can be fully customized to meet your specific needs.
✓ No acquisition premium required

X It takes a long time (approximately 5-6 months).
X A complete compliance system needs to be built from scratch.
X The approval outcome is uncertain.

Reference period

5-6 months

Suitable for

Applicants with ample time

Acquisition of licensed companies

Acquiring a license through the acquisition of an already licensed corporation

Recommend

✓ Faster (approximately 3-4 months)
✓ It can inherit the existing compliance architecture and customer base.
✓ The approval is highly certain (the license already exists).

X An acquisition premium (license and shell price) needs to be paid.
X It may inherit historical compliance issues or potential liabilities.
X A comprehensive due diligence investigation is required.

Reference period

3-4 months

Suitable for

Those who want to enter the market quickly

Key points of due diligence for acquiring licensed companies

Acquiring a licensed company is a fast track to obtaining a Type 8 license, but thorough due diligence is essential to identify potential risks. The following are key areas of review:

Compliance history review
  • SFC Disciplinary Record
  • Past regulatory inspection results
  • Customer complaint records
  • AML/CFT compliance status
Financial Status Review
  • Audited financial statements for the past three years
  • Capital adequacy ratio
  • Outstanding liabilities and contingent liabilities
  • Tax compliance
Legal risk review
  • Existing and potential litigation
  • Contractual obligations and commitments
  • Intellectual Property Status
  • Employment contracts and labor disputes
Operational status review
  • IT system and data security
  • Business Continuation Plan
  • Key personnel retention voluntary
  • Customer asset segregation status

Find target companies

Find companies holding Type 8 licenses for sale through professional advisors or market channels. Assess the target company's license status, compliance history, and business operations.

2-4 weeks

Signing a confidentiality agreement and letter of intent

Sign a confidentiality agreement (NDA) with the seller and, after initial assessment, sign a letter of intent (LOI) or memorandum of understanding (MOU) to clarify the transaction framework and key terms.

1-2 weeks

Comprehensive due diligence

Engage legal, financial, and compliance advisors to conduct comprehensive due diligence on the target company, identify potential risks, and assess the value of the transaction.

3-6 weeks

Signing of share purchase agreement

Based on the results of due diligence, a formal Share Purchase Agreement (SPA) will be negotiated and signed, specifying the transaction price, closing conditions and representations and warranties.

2-3 weeks

Submit a change request to SFC

Submit an application for change of substantial shareholder to the SFC, providing detailed information on the new shareholder and an evaluation document of a suitable candidate.

1-2 weeks

SFC Approval and Delivery

SFC reviews the change application and makes a decision. After approval, procedures such as equity transfer, board reorganization, and change of responsible personnel are completed.

8-12 weeks
Section Seven

What are the ongoing compliance obligations after obtaining a license?

Holding a Type 8 license is not the end goal; continued compliance is key to maintaining the license.

Financial Resources Rules

continued
  • Maintain minimum quick capital of HK$300 million.
  • Submit a Financial Resource Report (FRR) to the SFC monthly.
  • SFC must be notified immediately if quick funds fall below 120% of the prescribed level.
  • Comply with large risk exposure limits

AML/CFT compliance

continued
  • Perform customer identification and due diligence (CDD/EDD).
  • Continuously monitor customer transactions and identify suspicious activities.
  • Submit suspicious transaction reports to the Joint Financial Intelligence Unit (JFIU)
  • Regularly update AML/CFT policies and procedures

Regular reporting obligation

continued
  • Submit a financial resource declaration form monthly.
  • Submit audited annual financial statements each year
  • Submit an annual declaration form every year
  • Report any significant changes in a timely manner (such as the departure of a Research Officer).

Personnel Management Obligations

continued
  • Ensure that ROs continue to meet the criteria for suitable candidates.
  • ROs must notify SFC within 7 business days of leaving the company.
  • Licensed personnel shall complete no less than 5 hours of CPT annually.
  • Maintain at least 2 ROs for each type of regulated activity

Customer asset protection

continued
  • Client funds must be deposited into a separate trust account.
  • Client securities must be strictly separated from company securities.
  • Regularly reconcile customer assets
  • Comply with the collateral management regulations for margin financing

Risk Management

continued
  • Establish and maintain a credit risk assessment model
  • Set reasonable initial margin and maintenance margin ratios
  • Establish a margin call and forced liquidation mechanism.
  • Conduct stress tests regularly

Consequences of late payment

Under section 138(2) of the Securities and Futures Ordinance, all intermediaries and licensees are required to pay the annual license fee within one month of the anniversary of the date of their license or certificate of incorporation. Failure to pay on time will result in the following consequences:

Overdue period as a result of
Less than a month A 10% surcharge will be levied.
More than one month but less than two months A 30% surcharge will be levied.
More than two months but less than three months A 50% surcharge will be levied.
More than three months but less than four months Temporary suspension of license/registration
More than four months License cancellation/registration

Source: SFC Official FAQ (Updated March 14, 2025)

Section 8

FAQs

Frequently Asked Questions about Applying for Hong Kong Type 8 Licenses

Type 1 licenses (securities trading) allow licensed corporations to buy and sell securities for clients, i.e., brokerage business; Type 8 licenses (securities margin financing) allow licensed corporations to provide clients with loans for acquiring or holding listed securities (margin financing). While the two types of business differ in nature, they are often combined in practice because securities brokerages typically also offer margin financing services to clients. When combining these licenses, the higher of the two capital requirements is applied.

全新申請的參考週期約5-6個月，其中前期準備（公司註冊、人員招募、合規架構搭建）約需4-8週，SFC正式審批階段約需15週（依據SFC服務承諾）。如選擇收購持牌公司路徑，整體週期可縮短至約3-4個月。實際時間視申請資料的完整性、SFC的工作量及是否需要補充資料而定。

Under the Securities and Futures (Financial Resources) Rules (cap. 571N), the minimum paid-up capital for Type 8 licenses is a uniform HK$1,000 million, and the minimum liquid capital is HK$300 million. Unlike Type 1 licenses, Type 8 licenses do not differentiate between holding client assets and apply the same capital requirement uniformly. Liquid capital must be maintained continuously and must not fall below the prescribed level.

To apply for a Type 8 regulated activity responsible officer position, applicants must pass two examinations administered by the Hong Kong Securities and Investment Institute (HKSI): Paper 1 (Basic Securities and Futures Regulations, mandatory for all regulated activities) and Paper 8 (Securities Margin Financing Regulations, a specific paper for Type 8). Those with relevant academic qualifications or professional certifications may apply for partial exemptions. A license application must be completed within three years of passing the examinations.

Yes. The SFC allows applicants to apply for licenses for multiple regulated activities simultaneously. The most common combination is Type 1 (Securities Dealing) + Type 8 (Securities Margin Financing), as securities brokerage firms typically need to provide both trading and financing services. When applying for multiple licenses simultaneously, the capital requirement is the highest among all types, and the responsible personnel must pass the corresponding HKSI exam for each type.

The main risks of acquiring a licensed company include: inheriting historical compliance issues or SFC disciplinary records, potential undisclosed liabilities or litigation, legacy issues of mismanagement of client assets, and the risk of key personnel loss. Therefore, a comprehensive due diligence process must be conducted before any acquisition, covering aspects such as compliance history, financial condition, legal risks, and operational status. It is recommended to engage professional legal and compliance advisors for assistance.

The SFC has the authority to take action against licensed corporations that are inactive for an extended period. While the SFC will not automatically revoke a license due to inactivity, the licensed corporation must continue to meet all compliance obligations, including maintaining minimum capital requirements, submitting financial reports on time, and paying annual license fees. Failure to meet these obligations may result in the SFC suspending or revoking the license.

Yes. The SFC does not restrict the applicant's nationality or source of capital; foreign companies can apply for a Type 8 license after registering a subsidiary in Hong Kong. However, please note that the company must be incorporated in Hong Kong, have a physical office address in Hong Kong, have its responsible personnel residing in Hong Kong, and meet all local compliance requirements. Furthermore, if cross-border business is involved, the regulatory requirements of the relevant jurisdictions must also be considered.

About Aiying

Aiying (License.aiying.cc) specializes in global traditional finance and Web3-related license application and acquisition consulting services. With teams primarily located in Hong Kong, the UAE, and Europe, and strong relationships with local regulators, Aiying has successfully secured applications and smooth operations for leading and mid-tier crypto and traditional institutions. Team members are qualified in Hong Kong, Europe (Ireland), the UK, the UAE, and other jurisdictions, with a global network ensuring XNUMX/XNUMX professional support. Headquartered in Asia, the team brings together experts in operations, marketing, law, regulatory compliance, and accounting, adhering to clients' business objectives to provide comprehensive and in-depth strategies and solutions.

Authoritative guidance

Based on SFC official guidelines and Aiying's practical experience, we provide the most authoritative application guidance.

Useful Checklist

Detailed self-checklist and document preparation guide to ensure the completeness and accuracy of application materials

success case

100+ successful case experience summary, avoid common pitfalls and improve success rate

global vision

Integrate international best practices to ensure the forward-looking and adaptable compliance system

Aiying's "pre-screening mechanism"

To maximize your success rate, Aiying conducts an internal mock review of your application materials before formal submission. Our expert team acts as a regulator, scrutinizing each document from the most rigorous perspective to identify logical loopholes, data inconsistencies, and compliance gaps in advance.

Through this mechanism, we can ensure that the materials submitted to the regulatory authorities are highly professional, complete and impeccable, thereby minimizing the number of regulatory inquiries and significantly shortening the approval time.And reduced the license rejection rate by 67%.