Which license should a bank employee apply for? Will it be supervised by the SFC or HKMA?
What is a SFC license?
The full name of SFC is the Securities and Futures Commission, and it is the statutory regulator of the securities industry in Hong Kong. The Securities and Futures Commission was established in accordance with the Securities and Futures Ordinance to ensure that the securities industry is fair and orderly. The SFC is independent of the Hong Kong government, but is given the power to make subsidiary legislation, investigate the affairs of the securities industry, grant and revoke licenses for regulated activities in securities and futures. If a company (not a bank or an authorized institution) wants to be qualified for conducting a regulated activity, it needs to be licensed by the SFC for approval to conduct the regulated activity under the legal requirements.
What is a HKMA license?
The full name of HKMA is the Hong Kong Monetary Authority, which is the statutory regulatory authority for Hong Kong’s banking industry. The HKMA is an independent statutory body authorized by the Financial Secretary to manage Hong Kong’s foreign exchange reserves and maintain the linked exchange rate system. It is also responsible for the regulation and management of authorized banks or authorized financial institutions (i.e. licensed banks, restricted license banks and deposit-taking companies). In Hong Kong, the business of banks is diversified, and some banks even participate in the securities business. But the HKMA is not the main regulator of the securities industry. The SFC is the expert in this area. However, the SFC does not want to have more workload, and does not want to issue licenses directly to banksto avoid complicating the regulatory framework. Banks that need to conduct regulated securities business should be jointly supervised by the SFC and HKMA. The HKMA will provide direct front-line supervision, and the SFC will only cooperate passively.
Therefore, banks that conduct securities business will only be registered as “registered institutions” with the Securities and Futures Commission, not “licensed corporations” directly supervised by the Securities and Futures Commission. Therefore, employees who conduct regulated activities in “registered institutions” are also registered with the SFC and are called registrants, not licensees. It is also worth mentioning that although these registrants are registered with the Securities and futures Commission in name, in fact all forms submissions and communication are carried out with the HKMA. HKMA also handles complaints regarding registered institutions or registrants.
|Company Category||After conducting securities business, it will become||Name of Licensed/registered staff||Regulatory Authority|
|Companies that are not Banks||Licensed Corporation||Licensee||SFC|
|Authorized Financial Institution||Registered Institutions||Registrant||HKMA(+SFC)|
Licensing/registration, reporting system
Although the regulators are different, the commonalities between licensed corporations and registered institutions are that all individuals who wish to conduct regulated activities must meet the requirements of relevant examinations, academic qualifications and relevant competency guidelines, and that the employer must be responsible for applying or registering for the employees. No matter what, employees who work in licensed corporations or in registered institutions will need to abide by the same competency guidelines and take the same combination of examinations if they want to obtain license/registrations. As a result, most of the licensing requirements are not very different. If you wish to search for more general public information about a licensee, you should be able to search for their license number, license type, company, etc., you can go to the SFC’s public register and enter the licensee’s full name in Chinese or English, or the central entity number:
If you wish to search for a registrant’s basic information in the public register, such as license number, license type, company, etc., you can enter the full Chinese or English name in the HKMA’s public register (the first or last name cannot include extra spaces), or the registration number, and then enter the verification code:
Please be aware if there is inappropriate spacing, such as Chan Tai Man, the search results will not be displayed correctly when you enter ” Chan Tai Man” or “Chan Tai Man “,.
Which authority should a bank employee gain approval from?
Bank employees need to first consult the company’s human resources or compliance department and confirm which company they will represent. Because some banks do not directly conduct securities business with the bank itself. They may open a subsidiary company to separate different businesses. Most retail bank employees only represent the bank itself, therefore only HKMA registration is required, and not a license from SFC. However, a private bank employee may have the chance to represent a bank and a license cooperation simultaneously, this will occur especially when dealing with derivative transactions. Under this circumstance, the same person will be a licensed and registered person at the same time.
Also to mention, the licensee of the SFC has each assigned a unique license number. The first 3 digits of the license number are composed of English letters, and the last 3 digits are composed of numbers. A total of 6 digits will be formed which is subsequently named as the CE number. The registrant number of the HKMA is composed of 2 English letters and 4 numbers. A person can have both the SFC CE number and the HKMA registrant number, which are two different sets of numbers.
How can we help?
2CExam provides HKSI LE, IIQE, EAQE and SQE related exam preparation materials. We sell mock question banks for HKSI LE Papers 1, 2, 3, 5, 6, 7, 8, 9, 12 in Chinese and English; and bibles for HKSI LE Papers 1, 2, 6, 7, 8 in Chinese. We also offer 1 on 1 tutorial services. Besides, we have also made free tutorial videos for HKSI LE Papers 1, 2, 6, 7, 8, 12 and posted on public channels such as Youtube/ Bilibili/ Tencent/ Iqiyi. 2CExam has been an exam training expert for years. Should you need any help please visit www.2cexam.com or contact us through:
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