SFC Type 4 Licence: Advising on Securities

Type 4 is one of the ten regulated activities in Schedule 5 of the Securities and Futures Ordinance and covers advising on securities: investment advice to clients, research reports, and verbal recommendations to securities clients in Hong Kong.

Most investment research firms, wealth management advisers and portfolio consultants need it. Equity research, bond research, structured product advice and investment strategy consulting all sit inside the licence. Discretionary account management, dealing and managing client portfolios do not: discretionary management requires a Type 9 licence and is prohibited under a Type 4 licence alone.

It gives the legal right to advise on securities in Hong Kong without exposure to penalties for unlicensed advisory activity, and it signals to professional investors that the firm meets the SFC's competence, financial stability and internal control standards.

It also opens access to Hong Kong's capital market and to cross-border advisory work linked to mainland China's securities and futures markets (the SFC recognises industry experience gained in the mainland in certain circumstances), and it allows the firm to charge for advisory services within a recognised regime.

Virtual asset advisory can be offered under a Type 4 licence in some cases. Firms advising on tokenised securities, security token offerings or virtual asset fund distribution need to show mature technology and compliance systems, and detailed record keeping across every advisory category.

According to the published service commitment of the SFC, it takes approximately 15 weeks from the date of receipt of a complete licensing application, but it is a service target, not a statutory deadline, and depends on various factors including complexity of the case, workload of the case officer and response of the applicant to queries on the business plan, sample reports and responsible officer qualifications. On average, an applicant can expect 3.5-4 months to obtain a license. Detailed documentation and preparedness of responsible officers facilitate the process. We make sure that your application is complete and help you to avoid any delays.