Posted inRegulation

HK sets exam waiver for AM licenses

Hong Kong’s Securities and Futures Commission is smoothing the way for more asset management licenses by relaxing some regulations.


The regulator issued a circular in response to enquiries from licensed persons who intend to broaden their business scope to include asset management.

In general, a responsible officer (RO) for Type 9 regulated activity is required to pass licensing examinations. However, the SFC may exempt a responsible officer applicant from taking the exams under certain conditions.

For example, an RO licensed for Type 1 (dealing in securities) regulated activity may be licensed to engage in Type 9 activities without sitting for the required exams if he or she has five or more years of related experience in managing discretionary accounts and is required to complete additional continuous professional training (CPT) hours.

The RO’s firm can then carry on a discretionary account business. However, the firm cannot conduct broader Type 9 activities, such as fund management, unless another RO who serves as a manager-in-charge of the overall managing oversight function meets all the requirements for being licensed for Type 9 activity, including passing the required examinations.

For ROs who intend to manage private investment funds, the applicant is required to have at least eight years of industry experience in recognised local or overseas markets and complete additional CPT hours to be exempted from the exams. However, these applicants must work for a corporation that services only professional investors.

According to the circular, the SFC’s frequently asked questions under the topic of licensing examinations has been revised to include the clarifications. The licensing handbook can provide more information on approval and application procedures. 

“We welcome existing licensees to broaden their business scope in light of the growth in Hong Kong’s asset management industry,” Julia Leung, SFC’s executive director of the intermediaries division, said in a statement.

In Hong Kong, the number of licensed corporations increased by 60% to 1,348 in March this year from 2011, while the number of responsible officers increased by 55% during the same period, according to data from the SFC.

 Source: Securities and Futures Commission

Currently, there are more licensed firms with Type 9 licences than with Type 1 licenses (1,129), according to SFC data.


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