The formal processes for obtaining authorization will also vary according to the regulator and type of business activity being conducted. Please see below the licensing process of the SFC, the HKMA, the IA and the MPFA. If you would like more details on the licensing process in other industry sectors (e.g., money remittance, trust services, money lending), please feel free to reach out to us.

SFC licensing process

• General – To lodge a license application, applicants will need to complete certain prescribed licensing forms and supplements and pay an application fee. The submission is made via the SFCs online system called WINGS. The application includes relevant information describing the following key areas:
  • Proposed business activities – The applicant shall provide basic corporate information and information on the scope of its proposed business activities. The applicant shall complete the SFC questionnaires on its internal controls, business operations, policies and procedures, and other systems and controls.
  • Corporate structures – This will include information in relation to the shareholding structure of the corporation. The applicant shall also provide its organization structure showing the key personnel (including the MICs) and the reporting lines.
  • Responsible officers – The proposed responsible officers shall complete SFC application forms and other supporting documents (e.g., their resumes) to demonstrate their competence.
  • Directors – All the directors (executive and non-executive) of the applicant will need to complete SFC forms.
  • Substantial shareholders and (in the case of VA trading services operators) also ultimate owners – Substantial shareholders / ultimate owners (as the case may be) and their directors will need to complete SFC forms.
  • Bank accounts – Bank accounts information shall be provided, and the SFC may require copies of the bank statements to demonstrate compliance with the regulatory capital requirements.
  • External assessment reports – Applicants for the operation of VA trading platforms are required to engage an external assessor to assess their policies, procedures, systems and controls, and to submit the assessor’s reports to the SFC: (i) when submitting the licence application (Phase 1 Report); and (ii) after approval-in-principle is granted (Phase 2 Report).
• The applicant may be asked to complete other supplements and provide additional information to the SFC where appropriate.

The SFC has indicated that the processing of an application submitted by a new industry participant for an RA license normally takes approximately 15 weeks from official acceptance of the application. The SFC does not commit to any specific timeframe regarding the issuance of a VA related license.

HKMA authorization process

• Before submitting an application – The HKMA generally encourages applicants to meet or discuss their plans with the HKMA first before an application is submitted. Although the HKMA maintains standard lists of required licensing materials, it is generally advisable to ask for a list on a case-by-case basis.
• Application materials – An application for authorization as an AI will typically need, at a minimum, to be composed of the following materials:

• Application letter setting out the reasons for the application and the applicant's background and describing how the relevant authorization criteria will be met
• Certified copies of the applicant's audited annual reports for the last three years and certified copies of certain corporate documents (e.g., the board resolution approving the application and the applicant's constitutional documents)
• Business plan and financial projections (including projected balance sheet, capital and liquidity ratios and profitability) for the first three years of the proposed Hong Kong operation
• Organizational chart, staffing plan and details of proposed internal control systems for the proposed Hong Kong operation
• Certain resolution planning-related information
• Questionnaires for certain senior executives of the Hong Kong operation (e.g., chief executive, alternate chief executive) and controllers
• In the case of a foreign applicant, a letter from its home regulator confirming its consent to the applicant's Hong Kong plans.

The HKMA has wide discretion to ask for additional information (which it almost always exercises).

Prescribed time periods apply only to the processing of applications for HKMA consent to the appointment of certain senior executives and (where required) controllers of an AI. The HKMA is generally required to approve or deny such applications within three months of receiving the completed application. However, the actual processing period is often longer because the "clock stops running" if the HKMA raises further information requests and until the requested information is provided to the HKMA.

The BO does not prescribe the time period within which the HKMA must process an application for authorization as an AI, and its processing may, depending on the circumstances, take substantially longer.

The approval/licensing process for money brokers (under the BO) and issuers/facilitators of regulated stored value facilities (under the PSSVFO) is similar.

IA authorization process

• Preliminary meeting with IA – A preliminary meeting with the IA will usually be arranged before the application form is completed. Documents such as the market feasibility study report, background of the applicant and its group (if applicable) — including a corporate structure chart and the latest financial statements of the applicant and its group (if applicable) — as well as an overview of its business plan may need to be submitted to the IA for prior consideration. The meeting will enable both the applicant and the IA to understand each other better as well as enable the IA to give its informal views.
• Draft application – The applicant may proceed to prepare the application after it has discussed its proposal with the IA and it is considered acceptable to the IA. The application is normally submitted in draft form, and the IA will consider the information in detail and revert to the applicant on outstanding issues or deficiencies if necessary. As part of the draft application, the applicant will also need to submit documents such as corporate and proposed organizational charts, prescribed forms for individual and corporate controllers of the applicant, financial projections (prepared based on different assumptions), copies of reinsurance treaties, policies or manuals on internal control, underwriting, claims handling and reserving, reinsurance, investment, and AML policies.
• Formal application – As soon as the applicant receives positive notification of the IA's initial assessment, it may proceed to make a formal application to the IA.
• Decision on the application – Provided that the formal application has been properly prepared and contains all the relevant information and documents adequate for the IA to make a decision, the IA will advise the applicant of its decision on the application after a certain period. If authorization can be given, the IA will give its approval-in-principle to the applicant and at the same time advise it of the requirements that should be complied with before formal authorization will be given.
• On-site inspection – The applicant may need to arrange a site visit to its office by the IA when it has made all the preparations necessary to commence business. During the visit, the applicant will need to satisfy the IA that all operational systems and staff are in place to enable the applicant to commence business immediately.
• Formal authorization – If the IA is satisfied that the applicant has fulfilled all the requisite requirements, a formal authorization will be issued.

MPFA authorization process

A corporation seeking to be a principal intermediary must complete an application form for registration as a principal intermediary. There should be at least an accompanying application for registration as a subsidiary intermediary (an individual) who will act as a responsible officer of the principal intermediary. The individual must complete an application form for registration as a subsidiary intermediary and approval of attachment of a subsidiary intermediary to a principal intermediary.

Principal intermediaries with a large number of subsidiary intermediaries attached to it are encouraged to have more than one responsible officer to oversee the regulated activities. This will minimize the risk of the principal intermediary and subsidiary intermediaries not being able to carry out regulated activities if the approval of the only responsible officer is revoked or suspended.

As soon as practicable after the MPFA has registered a principal intermediary and/or subsidiary intermediary, the MPFA will assign an industry regulator as the frontline regulator (i.e., HKMA, IA and SFC in the banking, insurance and securities sectors, respectively) of such intermediary.