Contents

 
License Application
1. Introduction to the functions of license plate No. XNUMX
II. Basic Qualification Requirements
III. Application Process
IV. Application Period
License Acquisition
Acquisition process and time
Service Introduction
Customer type
License Case
team introduction
FAQ

Introduction to the functions of license plate No.1

License No. 1 is a license issued by the Hong Kong Securities and Futures Commission under the Securities and Futures Ordinance (SFO), authorizing licensed corporations to engage inType 1 regulated activity (securities trading), allowing securities-related trading activities to be legally conducted in Hong Kong. Its functions cover traditional securities (such as stocks and bonds), security tokens and specific structured products, and it is the core qualification for entering the Hong Kong financial market.

Core functions
No.1 card supports the following main business functions:

  1. Securities Trading

    • FEATURES: Buying and selling securities as defined in the Securities and Futures Ordinance (such as stocks, bonds, security tokens) for clients.
    • application :
      • Brokerage business: providing stock trading services.
      • Virtual asset trading: buying and selling security tokens.
    • value：Enter the Hong Kong capital market and attract local and international clients.

  2. Margin Trading

    • FEATURES: Providing financing (loans) to clients to purchase securities, with clients using securities as collateral and the licensed corporation charging interest.
    • application :
      • Provide leveraged trading (such as stock margin accounts) to retail or institutional clients.
      • On virtual asset platforms, if security tokens are traded, margin financing can be provided (additional compliance measures are required).
    • Regulatory requirements :
      • Comply with the SFC’s Guideline on Securities Margin Financing.
      • The minimum liquid capital requirement is higher (usually more than HK$300 million, depending on the scale of business).
      • Implement strict risk management (such as financing ratio restrictions and collateral valuation).
      • Client suitability assessment to ensure investors understand the risks of leverage.
    • value: Increase profits through interest income and attract customers with high risk preferences.
    • Remark：If virtual assets are involved, it is necessary to ensure token liquidity and collateral compliance. The circular dated January 2025, 1 emphasizes additional risk disclosures.

  3. Brokerage

    • FEATURES: Acting as a client agent to execute securities transactions through the Hong Kong Stock Exchange (HKEX, Hashkey, OSL) or other platforms.
    • application: Provide trading accounts and charge commissions.
    • value：Support high-frequency and cross-border transactions and enhance competitiveness.

  4. Omnibus Account Operations

    • FEATURES: Opening a universal account to centrally manage securities transactions on behalf of multiple clients and internally record underlying client positions.
    • application :
      • Cross-border services: cooperation with overseas exchanges.
      • Virtual assets: Integrate customer orders and cooperate with other VATPs.
    • value: Improve transaction efficiency and is suitable for large customer groups.

  5. Securities Distribution

    • FEATURES：Distribute securities products (such as IPOs, bonds) and participate in issuance.
    • application: Selling new shares or security tokens (STOs).
    • value: Participate in financing and expand income.

  6. Virtual asset trading (security tokens)

    • FEATURES：Supports the buying, selling, matching or agency transactions of security tokens, and requires a No. 1 license.
    • application: Operate VATP and trade equity or debt tokens.
    • value：Seize the blockchain market opportunities.
    • Remark：Non-security tokens require a VASP license (Anti-Money Laundering Regulations).

Additional features (conditions required)

  • Retail Investor Services: The circular dated January 2025, 1 allows security token trading to be offered to retail investors, requiring risk disclosure and knowledge testing.
  • Pledge Service: The May 2025 staking guidelines allow for security token staking, subject to additional compliance.
  • Margin Financing Extension: If you offer margin trading on security tokens, you must comply with the January 2025 retail investor protection requirements.

2. Companies applying for Hong Kong Type 1 license (securities trading license) need to meet the following basic eligibility requirements:

According to the Securities and Futures Ordinance (SFO) and the SFC’s guidelines, a licensed corporation applying for a Type 1 license must meet the following core requirements:

  1. Company registration

    • Claim: Must be a company incorporated in Hong Kong (under the Companies Ordinance) or an overseas company registered in Hong Kong (non-Hong Kong company).
    • the purpose: Ensure that the company has a legal entity in Hong Kong and is regulated by the Securities and Futures Commission.
    • Remark：Virtual asset trading platforms (VATPs) need to prove substantial operations in Hong Kong (such as local offices and employees).

  2. Financial requirements

    • Minimum capital :
      • Paid-up capital: HK$500 million (securities trading).
      • Working capital: HK$300 million.
    • Operational Reserve: Hold current assets sufficient to cover at least 12 months of actual operating expenses.
    • Margin financing (if applicable): Higher working capital requirements and the need to ensure additional risk buffers in accordance with the Guidelines on Securities Margin Financing Activities.
    • the purpose：Ensure that the company is financially sound and able to cope with operational and market risks.
    • Virtual Asset Specific Requirements: You need to purchase insurance that covers cyber risks and asset theft (such as for cold wallets).

  3. Responsible Officers (RO)

    • Quantity: Appoint at least 2 responsible officers to oversee the Type XNUMX business (including standard securities, virtual assets or Omnibus accounts).
    • Qualifications/Licenses :
      • Possess at least 3 years of relevant industry experience, or have passed the Hong Kong Securities and Investment Institute (HKSI) examinations (e.g. Paper XNUMX, Paper XNUMX) and been exempted.
      • Proof of "Fit and Proper", including:
        • No criminal record.
        • Financially sound (no bankruptcy).
        • Good character and professional ability.
    • the purpose: Ensure that the business is managed by qualified personnel and complies with CSRC standards.
    • Remark: ROs of virtual asset businesses need to be familiar with blockchain technology and AML/CTF requirements.

  4. Compliance Capabilities

    • Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) :
      • Have a robust KYC process in place, especially for the underlying customers of the Omnibus account (name and identification number required).
      • Implement transaction monitoring and suspicious activity reporting, using Regtech tools such as Chainalysis.
    • Risk Management :
      • Formulate monitoring policies for market manipulation and illegal trading.
      • Margin financing requires additional risk control (such as financing ratio and collateral valuation).
    • Client asset protection :
      • Securities are held in trust and managed in separate accounts.
      • 98% of virtual assets must be stored in cold wallets.
    • the purpose：Ensure compliance with the Anti-Money Laundering Ordinance (AMLO) and the SFC’s Code of Conduct.

  5. Technical capabilities (virtual asset specific)

    • Trading System: A robust matching engine that complies with the CSRC’s cybersecurity standards.
    • Hot and cold wallets: 98% of virtual assets are stored in offline wallets to prevent theft.
    • external evaluation：Submit Phase 1 technical report, and have an independent organization review the system security, KYC and token inclusion standards.
    • the purpose：Ensure the security and reliability of virtual asset trading platforms.
    • Remark: The circular dated January 2025, 1 emphasized that technologically mature platforms can be granted simplified approval.

  6. business plan

    • Claim：Submit a detailed business plan stating:
      • Business model (securities trading, margin financing, virtual assets, Omnibus account).
      • Sources of income (e.g. commissions, interest).
      • Market positioning and customer base (retail or institutional).
    • Virtual asset specific：A legal opinion must be submitted for each token to confirm whether it is a "security".
    • the purpose：Prove the feasibility and compliance of the business.

  7. Ongoing Compliance Commitment

    • report: Submit business reports monthly and audited financial statements and compliance reports annually.
    • training: RO is required to complete Continuing Professional Training (CPT).
    • Policy updates: Comply with the May 2025 pledge service guidelines (if virtual asset pledge is involved).
    • the purpose：Ensure that licensed corporations comply with regulatory requirements in the long term.

3. Application Steps Guide

  • Company Requirements :

    • Must be a Hong Kong registered company or an overseas company registered under the Companies Ordinance.
    • Financial requirements:
      • Minimum paid-up capital: HK$500 million (securities trading).
      • Minimum liquid capital: HK$300 million.
      • Hold current assets sufficient to cover at least 12 months of actual operating expenses.
    • Where Omnibus accounts are involved, demonstrated system capability to manage complex client asset segregation and record keeping.

  • Responsible Officers (RO) :

    • Appoint at least two responsible officers to oversee operations and ensure compliance (including AML/CTF).
    • Each responsible officer shall:
      • Have more than 3 years of relevant industry experience, or hold an individual license (can apply for exemption from HKSI examination).
      • Proof of "Fit and Proper" status, including no criminal record, sound financial standing and good character.

  • Business scope confirmation :

    • Standard securities trading: involving traditional securities such as stocks and bonds.
    • Virtual asset trading:
      • Confirm whether the virtual assets to be traded are "securities" (a legal opinion is required).
      • If it involves security tokens, a Type 1 license (and possibly a Type 7 license) is required; if it only involves non-security tokens (such as Bitcoin), perhaps only a VASP license is required.
    • Omnibus accounts: If the platform trades on behalf of clients through an omnibus account, it needs to provide detailed information on the underlying client management and cooperation arrangements with other platforms/exchanges.

  • core file :

    • Fill in the SFC prescribed form (Form 1U or Form 2U, depending on the type of business).
    • Submit company registration certificate, organizational chart, shareholders and ultimate beneficial owners background.
    • A business plan detailing:
      • Business model (standard securities trading, security token trading, or Omnibus account operation).
      • Technical specifications of the trading system (including matching engine, ratio of hot and cold wallets, etc.).
      • Risk management policies (market manipulation, illegal trading monitoring).
      • Customer asset protection measures (98% of virtual assets are stored in offline wallets and independent trust accounts).
    • Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) policy, covering:
      • Customer Due Diligence (KYC) process, especially for the underlying customer of the Omnibus account (name and unique identification number required).
      • Transaction monitoring and suspicious activity reporting mechanisms.
      • Use Regtech tools such as Chainalysis to conduct customer screening.
    • Financial statements demonstrating capital adequacy and liquidity.

  • Virtual Asset Specific Requirements :

    • A legal opinion for each virtual asset to be traded, confirmed by an independent lawyer as to whether it is a "security".
    • Submit external evaluation reports (Phase 1 and Phase 2) to be reviewed by independent professional organizations:
      • Platform architecture (technical security, hot and cold wallet management).
      • KYC/AML/CTF measures.
      • Token inclusion standards and network security.
    • Purchase insurance that covers virtual asset risks (e.g. cyber attacks, asset theft).

  • Omnibus Account Specific Requirements :

    • Detailed description of account structure and operational processes, including:
      • Underlying customer identity disclosure and KYC process.
      • Internal controls to prevent duplicate orders and ensure fair allocation.
    • Submit agreements with partner platforms/exchanges to ensure compliance with Hong Kong and overseas regulatory requirements.
    • Prove data security measures to prevent leakage of underlying customer information.

  • Other cases :

    • Proof of qualifications of the responsible person (resume, experience certificate or examination exemption certificate).
    • Annual compliance audit plan, prepared by an independent accounting firm.
    • Cybersecurity policy and emergency response plan.
  • Submission method：Submit all materials through the CSRC WINGS online platform.
  • cost :
    • Application fee for No. 4,900 license plate: approximately HK$XNUMX (corporate).
    • If you apply for a No. 6,900 license plate at the same time: approximately HK$XNUMX.
    • VASP license fees are charged separately (refer to the SFC guidelines).
  • Notes :
    • Ensure that the materials are complete. Omnibus accounts or virtual asset businesses may require additional supplementary information (such as underlying customer KYC procedures).

  • Approval Process :

    • The CSRC reviews the compliance of application materials, with a focus on:
      • Feasibility of business plans and risk management.
      • The robustness of AML/CTF measures (particularly for underlying customers of Omnibus accounts).
      • Security of technical systems (cold wallet storage, network security).
      • Legal classification of virtual assets (Legal opinion on security tokens).
    • Additional documentation, interviews or on-site inspections (particularly for trading systems and Omnibus account operations) may be required.
  • Time: Typically 6 to 12 months, Omnibus accounts or virtual asset businesses may take longer due to complexity.

  • FAQs :

    • Inadequate AML/CTF measures, substandard technical systems or insufficient transparency of Omnibus accounts may result in delays or rejections.
    • If you cannot prove that your business is actually operating in Hong Kong (e.g. you have no local office or employees), your application may be rejected.

  • After approval :

    • The company obtained a Type 1 license (and possibly a Type 7 license) to conduct securities trading (including security tokens).
    • If you apply for a VASP license at the same time, you must comply with AMLO and the "Guidelines for Virtual Asset Trading Platform Operators".

  • Ongoing compliance requirements :

    • Finance and Reporting :
      • Submit monthly business activity reports (including Omnibus account transaction details).
      • Audited financial statements and compliance reports are submitted annually and reviewed by independent professional organizations.
    • AML/CTF :
      • Continuous KYC, transaction monitoring and suspicious activity reporting, especially for underlying customers of Omnibus accounts.
      • Use FinTech tools to optimize AML/CTF processes.
    • Client asset protection :
      • 98% of virtual assets are stored in offline wallets, and customer assets are held in trust.
      • Maintain effective insurance covering cyber risks and asset theft.
    • investor protection :
      • If services are provided to retail investors, additional safeguards (such as risk disclosure, knowledge testing) need to be implemented.
    • Omnibus Account Management :
      • Disclose underlying customer information regularly to ensure compliance with the Code of Conduct.
      • Implement internal controls to prevent duplicate orders or allocation errors.
    • Continuing Professional Training (CPT) :
      • Responsible personnel are required to complete designated hours of training each year.

IV. Application period for Hong Kong Securities Dealer/Securities Trading (VA) License No.1

Stairs content Estimated time Influencing factors Suggest
1. Preparation – Confirmation of business scope (standard securities trading, security token trading, Omnibus accounts).

– Hire professional consultants (lawyers, compliance experts) to develop business plans and AML/CTF policies.

– Appoint at least two Responsible Officers (ROs) with guaranteed qualifications (3 years of experience or examination exemption).

– Prepare application materials:

– Business plan (business model, risk management, customer asset protection).

– AML/CTF policy (including KYC of underlying customers of Omnibus accounts).

– Legal opinion on virtual assets (confirming whether they are “securities”).

– Technical system specifications and external evaluation report (Phase 1).

– Build/upgrade technical systems (hot and cold wallets, trade matching engine, network security).

– Internal testing of AML/CTF systems and cybersecurity measures.

 1 to 3 months

– Standard securities transactions: 1 to 2 months

– Cryptocurrency/Omnibus: 2 to 3 months

 – Consultant efficiency.

– Complexity of virtual asset classification (preparation of legal opinions).

– Technical system foundation (new development takes longer).

 – Entrust a lawyer to confirm the classification of virtual assets in advance.

– Pre-built hot and cold wallets and AML software (such as Chainalysis).

– Ensure the qualifications of responsible persons are clear and apply for exemptions early.
2. Application submission and preliminary review – Submit application (Form 1U, financial statements, business plan, etc.) through WINGS platform.

– Pay the fee (approximately HK$4,900 for a No. 6,900 license plate, approximately HK$XNUMX for a No. XNUMX license plate, and VASP is charged separately).

– The CSRC conducts a preliminary review of the completeness of the materials.

– If incomplete, additional information may be requested (Return of Application).

 1 to 2 months

– Standard service: 1 month

– Cryptocurrency/Omnibus: 1 to 2 months

 – Completeness of materials (incompleteness will be extended by 1 to 2 months).

– The workload of the Securities and Futures Commission (slightly slower during peak periods).

 – Internal review by consultant before submission.

– Prepare a rapid response mechanism to initial inquiries.
3. Substantive approval stage - Detailed review by the CSRC:

– Business plan feasibility and risk management.

– AML/CTF measures (KYC of underlying customers of Omnibus accounts).

– Technical system security (98% cold wallets, network security).

– Legal classification of virtual assets.

– Qualifications of responsible officers and the “fit and proper person” criteria.

– Additional information, interviews or on-site inspections (trading systems, network security) may be required.

-
Latest policy (January 2025)
：Qualified applicants can be approved directly through a simplified licensing process without the sandbox stage, which is suitable for platforms with mature technology and robust compliance.

 4 to 6 months

– Standard securities transactions: 3 to 4 months

– Cryptocurrency/Omnibus: 4 to 6 months

 – Business complexity (Omnibus or multi-tokens increase review time).

– Speed ​​of response to additional information (delay increases by 1 to 2 months).

– Technical system maturity (high standards are required to simplify processes).

 – Ensure that the technical system passes external assessment (Phase 1 report).

– Quick response to SFC enquiries (within 1 to 2 weeks).

– Communicate with the CSRC in advance on technical compliance in order to simplify the process.
4. Final approval and issuance of license – The CSRC confirms that the application meets the requirements and directly issues a Type 1 license (and possibly a Type 7 license).

– If a VASP license is involved, AMLO approval must be completed simultaneously (dual license).

-
No sandbox stage
: The latest policy allows applicants with mature technology and sound compliance to skip the sandbox and enter operations directly.

– If the review finds issues, a short-term monitoring period (1 to 3 months) may be required instead of a formal sandbox.

 0.5 to 1 months

– Standard service: 0.5 month

– Cryptocurrency/Omnibus: 0.5 to 1 months

 – The quality of application materials (if there are many problems, a short-term monitoring may be required).

– The speed of the final review by the CSRC.

 – Ensure all compliance measures are in place before submission.

– Prepare compliance reporting system for operational start-up.
5. Summary - Standard securities trading: 6 to 8 months (simple business, high-quality materials).
Cryptocurrency trading or Omnibus accounts: 8 to 12 months (due to legal opinions, KYC and technical review, more time is required).		 If the materials are incomplete or need to be supplemented multiple times, it may be extended by 2 to 4 months.
If the simplified process conditions are not met, a short-term monitoring period (an additional 1 to 3 months) may be required		 - Appoint a compliance consulting team similar to Aiying

Hong Kong Securities Dealer/Securities Trading (VA) No. 1 License Acquisition Process and Timetable

Stairs content Estimated time Key Requirements Suggest
1. Preliminary preparation -
Search for target
：Screen the legal entities holding the No. 1 license, confirm whether they include the No. 7 license/VASP, and match the customer’s business needs (standard securities, virtual assets, Omnibus).

-
Touch demand
：Preliminary contact with the seller to confirm transaction intention and business fit (such as technical system, customer base).

-
Negotiate price
: Preliminary discussion on valuation (millions to tens of millions of HKD, depending on the type of licence and assets).

-
Sign NDA/MOU
: Sign a non-disclosure agreement (NDA) to protect information and sign a memorandum of understanding (MOU) to clarify transaction intentions.

 0.5–1.5 months – The target business is consistent with customer needs.

– High level of seller cooperation.

 – Appoint consultants (such as Aiying) to screen targets.

– Clarify requirements (such as virtual asset technical requirements).
2. Due Diligence (DD) – Audit target corporation:

– License status (valid, unrestricted).

– Financial condition (adequate capitalization, no debt).

– Compliance record (no violations/investigations).

– Technical system (cold wallet, KYC, VATP applicable).

– Confirm Omnibus account support capabilities (KYC process).

– Verify the classification of virtual asset tokens (whether they are “securities”).

 1–2 months – No regulatory or financial issues.

– Technical system meets standards (98% cold wallets).

 – Hire a lawyer/accountant (such as K&L Gates) to conduct a comprehensive review.

– Give priority to targets with clean compliance records.
3. Transaction Negotiation and Agreement – Negotiate final price and terms.

– Signing of a Share Purchase Agreement (SPA) to clarify equity transfer and compliance transition.

– Prepare a plan for change of new controller, shareholders and responsible officers (RO).

– Update legal opinions if virtual assets are involved.

 1–1.5 months – Clear transfer terms.

– The seller cooperates with the CSRC’s application.

 – The SPA contains protection against regulatory changes.

– Prepare new controller information in advance.
4. CSRC change application – Submit an application (WINGS platform, fee starts from HK$4,900), including:

– Proof of fitness and properness of the new controller/shareholder.

– New RO Qualification (3 years experience or exemption).

– Updated business plan (Virtual Assets/Omnibus).

– AML/CTF policy (Omnibus underlying KYC).

– Technical report (Phase 1 is required for virtual assets).

- Review by the CSRC, which may require additional information or an interview.

 1–2 months – The qualifications of the controller/RO are impeccable.

– Technical systems meet January 2025 standards.

 – Prepare RO certificate in advance.

– Ensure technology is in place to streamline processes.
5. Final Approval - SFC approved the change and updated the license information.

– Issuance of new licence certificate.

– If there are any problems, short-term monitoring (1–2 months) is required.

 0.5–1 months – The materials are complete.

– No regulatory objections.

 – Submit for review by former consultant.

– Prepare operational systems.
6. Business Start-up and Compliance – Complete equity transfer and start business.

– Continuous Compliance:

– Monthly report (Omnibus transactions).

– Annual audit report.

– 98% cold wallet and insurance.

– Comply with the May 2025 staking guidance.

 Immediately – Compliance system is sound. – Appoint a compliance team.

– Follow regulatory updates.

Customer service type

Asset Management Institutions

Asset Manager

Lending Institutions

loan provider

Exchange

cryptocurrency exchange

traditional finance

Traditional Financial

Brokerage Institutions

broker-dealer

OTC institutions

OTC provider

License Case

business planning

Conducting overseas financial business requires comprehensive planning

Corporate Framework

資金
  • Total treasury requirements
  • Liquidity requirements
  • Regulatory agencies’ external requirements
  • Are the funds already overseas?
Background of shareholders and directors
  • Suitable person
  • Industry background
  • Reputation and qualifications
  • Do Hong Kong/offshore license companies need to increase?
Professionals
  • Company person in charge
  • Professional staff (RO)
  • Other financial professionals: sales, compliance, settlement, etc.
  • Do the personnel match the business needs?
Office location
  • Business Location
  • Separation of front office, back office and back office in compliance with regulatory requirements
  • Connections to exchanges
  • Purchase office furniture

Corporate Compliance

license
  • What is the operating area itself?
  • The various laws and regulations that media business must comply with and the Securities and Futures Commission
  • Various periodic and prudent declarations

! The Jingbiantong team will assist customers in making the most appropriate plans and provide corresponding services in various fields according to their actual background and business needs.

我們的團隊

Director and Founder

▶ Honorary Fellow of Hong Kong Baptist University
▶ Served as executive director and independent non-executive director of several listed companies
▶ Manage the regulated business of comprehensive financial enterprises (listed and unlisted):
-Securities business (CSRC No. 1 license)
-Futures business (CSRC license No. 2)
-Investment Banking Business (China Securities Regulatory Commission License No. 6)
-Asset management business (CSRC license No. 4 and 9)
-Insurance Brokerage Business (PIBA Member)
-Money Lending Business (Money Lenders Licence)
▶ Served as the head of the legal and compliance department of a listed financial company, dealing with different regulatory agencies

Director and Founder

▶ Bachelor of Science, Master of Business Administration, Master of Financial Engineering, Hong Kong University of Science and Technology
▶ Long-term management of regulated businesses of comprehensive financial enterprises:
-Securities business (CSRC No. 1 license)
-Futures investment business (CSRC license No. 2, 5)
-Investment Banking Business (China Securities Regulatory Commission License No. 6)
-Automated Trading (CSRC License No. 7)
-Asset management business (CSRC license No. 4 and 9)
-Insurance Brokerage Business (IA Member)
-Money Lending Business (Money Lenders Licence)
▶ He has over 15 years of experience in asset management, investment research and compliance management and is a senior consultant in the industry.

General Manager

Bachelor of Arts from the Chinese University of Hong Kong, Master of Social Sciences in Communication from the Chinese University of Hong Kong, Master of Professional Accounting and Corporate Governance from the City University of Hong Kong.
She is a member of the Hong Kong Institute of Corporate Governance and the Institute of Chartered Secretaries and Administrators in the United Kingdom, and possesses the professional qualifications of Chartered Secretary (CS) and Corporate Governance (ACG).
Active in the compliance industry for over ten years.

Senior Vice President

Master of Finance from the Hong Kong Polytechnic University. Chartered Financial Analyst (CFA) charterholder.
He has nearly ten years of experience in the Hong Kong securities and asset management industry, managing assets worth over HK$30 billion.
Possess the qualification of Responsible Officer (RO) of a licensed company. Familiar with the products and compliance operations of Hong Kong securities firms and asset management companies.

Vice President

Bachelor of Science from the University of Hong Kong. With nearly ten years of experience in applying for various financial-related licenses and establishing software and hardware supporting facilities,
The clients we have served are located in many regions around the world, spanning different backgrounds, and their licensing needs are comprehensive and complex.

※ The list of professional team members is not exhaustive. There is also an advisory team including professional accountants from licensed institutions, lawyers, and former management members of regulatory agencies.

🏆 The team is more than 100 Different types of financial licenses provide various compliance-related services. Including but not limited to:

-State-owned enterprise group affiliated companies
-Subsidiary of China's Top 500 Private Enterprises
-Subsidiaries of major domestic real estate developers
-Hong Kong Main Board listed financial group

-Former fund manager of a large investment bank
-Algorithmic Trading Hedge Fund Firms
-Fin-tech companies under listed technology companies
-Top domestic law firms

🏆 The founder has managed listed financial companies and handled securities regulatory affairs.experienceRich, other team members have practical management and operation experience in well-known financial industries,Practical operationlevelWe provide feasible compliance ideas and compliance solutions to help customers develop their business.

🏆 The team has served mainland enterprises and entrepreneurs for many years.FamiliarDomestic conditions and customer needs, can assist customersadaptThere are many differences between the two places in terms of culture, supervision, system, business environment, etc.

FAQs

  • If the platform involves at least one security token, a Type 1 license is required; if only non-security tokens (such as Bitcoin) are traded, a VASP license (AMLO) is required. A common problem is that tokens are not clearly categorized.
  • solution: Entrust an independent lawyer to prepare a legal opinion to clarify the attributes of the token.
  • Requires higher liquid capital (depending on the scale of business), financing ratio restrictions, collateral management plans and customer suitability assessments in accordance with the "Guidelines on Securities Margin Financing Activities".
  • solution: Formulate detailed risk management policies and simulate CSRC review in advance.
  • The names and identification numbers of underlying customers need to be disclosed, and agreements with partner platforms (such as overseas exchanges) must comply with Hong Kong standards, with high transparency requirements.
  • solution: Use Regtech tools (such as Chainalysis) to optimize the KYC process and submit cooperation agreements.
  • Virtual asset platforms require 98% cold wallets, network security measures and independent assessment reports (Phase 1). Standard securities trading requires a robust trading system.
  • solution: Commission a third-party agency to review the technical system in advance to ensure compliance with the simplified process in January 2025.
  • The Circular of January 2025, 1 allows security token trading to be offered to retail investors, subject to risk disclosure, knowledge tests and leverage restrictions.
  • solution: Develop clear client education and disclosure documents.
Incomplete materials (e.g. missing legal opinion), substandard technical systems, insufficient RO qualifications, incomplete AML/CTF policies or unstable financial situation.
  • It is necessary to match business requirements (standard securities, virtual assets, Omnibus), confirm the target license status (number one license, whether it includes number seven license/VASP), technical system and compliance records.
  • solution：Appoint a consultant (such as Aiying) to screen targets and obtain preliminary information after signing the NDA.
  • Violation records, financial liabilities, outdated technical systems (such as no cold wallets) or incomplete compliance processes (such as insufficient KYC).
  • solution: Hire lawyers and accountants (such as K&L Gates) to conduct a comprehensive review, giving priority to targets without regulatory issues.
  • The Guidelines for Securities Margin Financing Activities require an assessment of clients’ risk tolerance, but the quantitative standards (such as income and investment experience) are vague. The CSRC may conduct random inspections during its ongoing monitoring and may impose fines or restrict business if the assessment is insufficient.
  • Potential risks: Violations may result in fines (up to HK$700 million) or license restrictions, affecting reputation.
  • solution: Develop a standardized assessment questionnaire (covering financial status and investment objectives) and keep it on file for at least 7 years. Conduct regular internal audits to ensure assessment consistency.
  • Due diligence (DD) may fail to uncover hidden liabilities (e.g. outstanding litigation, tax issues), and the buyer may be left with millions of Hong Kong dollars in liabilities or regulatory penalties after the acquisition.
  • Potential risks：The CSRC may reject the change application or require the buyer to bear the rectification costs and extend the period by 2-3 months.
  • solution: Commission a top accountant (such as PwC) to conduct an in-depth financial audit, and include an indemnity clause in the SPA to ensure that the seller assumes any legacy liability.
  • If the new controller is from a high-risk jurisdiction (such as a non-FATF member country), the CSRC may require additional disclosures (such as source of funds, international sanctions records) and conduct more stringent scrutiny.
  • potential risks: The approval process will be extended by 1-2 months. If the background issues are serious (such as sanctions list), the application will be rejected.
  • Solution: Submit certified proof of source of funds and no criminal record, and entrust a local lawyer and the Securities and Futures Commission to conduct a preliminary review.

  • The CSRC requires at least 2 ROs. The resignation or non-cooperation of the existing ROs may result in qualification vacancies, and new ROs must be recruited quickly and pass the review.
  • potential risks: The RO replacement review takes 1-2 months, and if the new RO is not qualified, the application may be rejected.
  • Solution：Confirm RO willingness before acquisition, identify alternative ROs in advance (with 3 years of experience or HKSI examination qualification), and submit preliminary application.

  • Some Type 1 licenses come with restrictive conditions (such as prohibition of retail services), and extension requires application to the CSRC to remove the conditions and submit additional risk disclosures and compliance plans.
  • potential risks: The review takes 1-2 months and the application will be rejected if there is insufficient compliance.
  • Solution: Conduct due diligence to confirm license restrictions, formulate a retail investor protection plan (knowledge test, risk disclosure) in advance, and communicate with the China Securities Regulatory Commission.

  • Clients often ask whether they can apply for License No. 7 (Automated Trading Services) or VASP license (Virtual Asset Service Provider) at the same time to save time.
  • answerYes, but you need to submit the corresponding forms separately (such as Form 1U and VASP application) and meet the independent requirements of each license (such as the seventh license requires additional technical specifications, and VASP requires stricter AML/CTF). Simultaneous filing may increase the complexity of the review and extend the review process by 1-2 months.
  • Solution: Coordinate the preparation of materials, ensure that the business plan covers multiple license businesses, and hire consultants (such as Deacons) to coordinate submission.

  • The client wants to test run the platform before approval is completed (e.g. internal test trading).
  • answer: No, it is illegal to carry out regulated activities (such as securities trading) before obtaining a licence, which may result in a fine (up to HK$700 million) or rejection of the application. Only internal technical testing is allowed, no real clients or funds are involved.
  • Solution: Limit the trial operation to non-regulated activities (such as simulated trading) and confirm the scope of the test with the SFC.

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