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Funds & Private Wealth

SFC Type 1 Licence: Dealing in Securities

Type 1 covers dealing in securities: buying, selling, subscribing for and underwriting securities, as principal or as agent. We scope the activity, build the application on the SFC's own terms and stay with the file through the regulator's questions to approval.

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  • TCSP licence TC000446
  • Xero Silver Partner
  • Established 2002
  • HKFRS statutory accounts
  • Hong Kong and mainland China
  • One in-house team

How we help

SFC Type 1 with Primasia

Application and documentation

Type 1 application filed through WINGS-LIC with the business plan, corporate structure, core business functions and a six-month financial forecast.

Responsible officers

At least two responsible officers appointed and approved, with HKSI examination coordination and multilingual support through competence assessment and interviews.

Compliance framework

Internal controls, AML and counter-terrorist financing policies, risk management, audit trail, record keeping and regulatory notification procedures.

After approval

Annual licence fee and renewal coordination, regulatory change monitoring, company secretarial support and SFC correspondence.

What's included

  • Type 1 application and WINGS-LIC submission
  • Business plan and six-month financial forecast
  • Fit-and-proper assessment for directors and substantial shareholders
  • Responsible officer and licensed representative applications
  • Compliance manual, AML/CTF and internal control framework
  • Post-licensing renewals, notifications and SFC correspondence

What a Type 1 licence permits

Hong Kong remains one of Asia's principal jurisdictions for securities dealing, and dealing in securities is a regulated activity under the Securities and Futures Ordinance (Cap. 571). A Type 1 licence covers purchasing, selling, subscribing for and underwriting securities, whether as principal or as agent, and there are ten regulated activities in total: Type 2 for futures contracts, Type 9 for asset management, Type 10 for credit rating.

The licence carries useful exemptions. Advice on securities (Type 4) and advice on corporate finance (Type 6) do not need separate licences where they are wholly incidental to the dealing business rather than services offered in their own right.

For clients whose plans extend into the mainland, dealing activity in Hong Kong pairs naturally with a China entity, and we coordinate both under one engagement.

Financial resources requirements

Minimum capital depends on the activity, and the thresholds must be maintained at all times, not just met at application. Standard dealing without securities margin financing requires paid-up capital of HK$5,000,000 and liquid capital of HK$3,000,000. Where the business involves securities margin financing, paid-up capital rises to HK$10,000,000 with liquid capital of HK$3,000,000.

Approved introducing agents have no paid-up capital requirement, but must hold minimum liquid capital of HK$500,000.

New applicants also prepare a financial forecast covering the first six months of operation, and excess liquid capital is expected to cover those projected expenses. We prepare the forecast alongside the application rather than treating it as an afterthought.

TYPE 1TYPE 4TYPE 9

Virtual assets and security tokens

Security tokens are securities under the SFO, so trading or distributing them is a regulated activity. Promoting and trading security tokens through a centralised platform requires a Type 1 licence, and operating a centralised virtual asset trading platform requires both Type 1 and Type 7 (Automated Trading Services) under the SFC's dual-licence structure for VATPs.

Firms dealing in virtual assets carry obligations beyond the standard Type 1 conditions, including enhanced disclosure, additional anti-money laundering measures and asset custody requirements. Non-security tokens traded through a centralised platform fall instead under the VASP regime in the Anti-Money Laundering Ordinance.

We help platform operators and token issuers work out which licences their structure actually needs before they build to the wrong one.

Application route

How a Type 1 application runs

Processing typically takes three and a half to four months. Missing documents, visa timing and recognition of overseas qualifications are the usual causes of delay.

  1. 01

    Scope the regulated activity

    • Confirm the business qualifies as dealing in securities
    • Identify any additional regulated activity, such as Type 9 for asset management
  2. 02

    Structure the entity

    • Incorporate in Hong Kong or register an overseas company
    • Define the board and designate Managers-in-Charge of each core function
  3. 03

    Allocate financial resources

    • Paid-up capital of HK$5,000,000 for standard dealing activities
    • HK$10,000,000 where securities margin financing is involved
    • Liquid capital of HK$3,000,000 maintained at all times
  4. 04

    Appoint personnel

    • Two or more responsible officers, one supervising at all times
    • HKSI examinations passed and relevant industry experience evidenced
  5. 05

    Build the compliance framework

    • Internal controls, AML and risk management procedures
    • Audit trail and record keeping systems documented
  6. 06

    Submit

    • Application filed with supporting documents
    • Application fee of HK$4,740 per regulated activity
  7. 07

    Answer the regulator

    • Respond to SFC queries during assessment
    • Every individual and entity assessed as fit and proper
  8. 08

    Operate under licence

    • Regulatory reporting procedures established
    • Financial resources adequacy maintained and CPT obligations met
    • Annual audit and returns filed

Type 1 licensing

Dealing in securities from Hong Kong

We minimise the complexity of the application and manage it through to approval, then keep the licence in good standing.

Speak to our licensing team

FAQs

SFC Type 1: questions we are asked most

What is an SFC Type 1 licence and who needs it?+

A Type 1 licence authorises dealing in securities: buying, selling, subscribing for and underwriting securities as principal or as agent. Brokerage firms, securities trading companies, distributors and underwriters need it, as do centralised platforms trading security tokens. Advice on securities or corporate finance wholly incidental to the dealing business does not require a separate licence.

What are the capital requirements for a Type 1 licence?+

Standard dealing requires paid-up capital of HK$5,000,000 and liquid capital of HK$3,000,000. Where securities margin financing is involved, paid-up capital rises to HK$10,000,000. Approved introducing agents are exempt from paid-up capital but must maintain liquid capital of HK$500,000. These levels must be maintained at all times, and new applicants prepare a six-month financial forecast with excess liquid capital covering projected expenses.

How long does a Type 1 application take?+

Around three and a half to four months where documentation is complete. Delays usually come from missing documents, work visa timing for overseas responsible officers, or the need to have overseas qualifications recognised. The application fee is HK$4,740 per regulated activity.

How many responsible officers do I need?+

At least two, with one available to supervise the business at all times. Each must pass the relevant HKSI examinations or hold a recognised equivalent, evidence relevant industry experience, and satisfy the SFC's fit-and-proper test under section 129 of the SFO. Managers-in-Charge must also be designated for each core business function.

Do I need a Type 1 licence for virtual assets?+

If the tokens are securities, yes. Promoting or trading security tokens through a centralised platform requires a Type 1 licence, and operating a centralised virtual asset trading platform requires both Type 1 and Type 7. Non-security tokens on a centralised platform fall under the VASP regime in the Anti-Money Laundering Ordinance instead.

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Where we deliver this

Hong Kong

Our home market, and the base for most of Asia's holding structures.

Mainland China

WFOE and Representative Office registration, then the first year of reporting.

Let's start a conversation

Tell us where the business is heading. We will tell you what it takes to get the structure, books and filings in order.

Discuss this service with an advisor+852 2882 2088