Can an individual holding a Type 1 license from the Securities and Futures Commission (SFC) also serve as a Responsible Officer (RO) for Type 4 and Type 9 licenses?

May 16, 2023

Question: Currently holding a Hong Kong Type 1 regulated activity (1st license – Securities Trading) licensed representative license and having several years of experience. Now passed the Hong Kong Securities and Futures Practitioners Qualification Exam Paper 6 (HKSI LE Paper 6). Can they become a Responsible Officer (RO) for Type 1 regulated activity (1st license – Securities Trading) and Type 9 regulated activity (9th license – Asset Management)?

Answer:

This question can actually be divided into two questions:

Can they become a Responsible Officer (RO) for Type 1 regulated activity (1st license – Securities Trading)?

Can they become a Responsible Officer (RO) for Type 9 regulated activity (9th license – Asset Management)?

According to the SFC’s “Guidelines on Competence,” to become a Responsible Officer (RO), one must meet the following four requirements:

1.Education/Professional Qualification

The requirements for education for Responsible Officers (ROs) and licensed representatives are the same. If the applicant currently holds an SFC Type 1 license, their education level should at least be a Level 2, or Grade E or above, in English/Chinese and Mathematics in the Hong Kong Diploma of Secondary Education Examination, which meets the license application requirements for ROs.

2.Relevant Industry Experience

If the applicant has 3 years of relevant securities industry experience within the 6 years immediately preceding the application date, they can meet this requirement.

According to the SFC’s Circular on Clarifying Competence Requirements for Existing Licensees Intending to Provide Asset Management Services, the SFC will consider the applicant’s accumulated work experience in the financial industry when assessing whether they meet the experience requirements.

For example, if a Type 1 licensee is currently permitted to conduct asset management activities that are wholly incidental to their trading activities (such as discretionary account management), the SFC will consider the relevant experience when assessing the individual’s application to become a Responsible Officer for Type 9 regulated activities.

The SFC will also recognize other industry experience, such as research, private equity, and proprietary trading, as relevant experience.

Please note that the so-called industry experience does not only refer to the applicant’s license record and work experience in Hong Kong, experience accumulated in other countries or regions can also be taken into account.

3.Management Experience

Within the past 3 years of industry experience, the applicant for Responsible Officer also needs to have 2 years of management experience. Management experience refers to the experience of leading subordinates, and generally speaking, managing more than one subordinate is considered management experience.

4.Passing Local Regulatory Framework Examinations

For individuals applying to become Responsible Officers, the prescribed local regulatory framework examinations are related to each type of regulated activity.

For example, if one wants to engage in Type 9 regulated activity (Asset Management), they need to pass the Hong Kong Securities and Futures Practitioners Qualification Exam Paper 6 (HKSI LE Paper 6);

If one wants to engage in Type 1 regulated activity (Securities Trading) or Type 4 regulated activity (Advising on Securities), they need to pass the Hong Kong Securities and Futures Practitioners Qualification Exam Paper 2 (HKSI LE Paper 2).

Local regulatory framework examinations usually cannot be exempted.

Therefore, if the above RO applicant:

  • Has more than 3 years of securities industry experience + 2 years of experience managing subordinates in their many years of work as a licensed representative,
  • Has passed the Hong Kong Securities and Futures Practitioners Qualification Exam Paper 2 / HKSI LE Paper 2, they can apply to become a Responsible Officer for Type 1 regulated activity (1st license – Securities Trading).

Whether they can apply to become a Responsible Officer for Type 9 regulated activity (9th license – Asset Management) depends on whether they have relevant industry experience in asset management.

That is, if they engaged in related asset management activities while conducting Type 1 regulated activities, the SFC may consider the relevant asset management experience as experience for Type 9 regulated activities when applying for RO.

In this case, if the above RO applicant has more than 3 years of asset management industry experience + 2 years of experience managing subordinates in their many years of work as a licensed representative, and their passing of the Hong Kong Securities and Futures Practitioners Qualification Exam Paper 6 (HKSI LE Paper 6) is still within the 3-year validity period when applying for the license, they can also apply to become a Responsible Officer for Type 9 regulated activity (9th license – Asset Management).

However, if the applicant did not engage in any asset management-related activities while conducting Type 1 regulated activities and has no asset management experience at all, it is recommended to gain relevant industry experience before applying for the RO of Type 9 regulated activities.

Relevant industry experience can be obtained by becoming a licensed representative for Type 9 regulated activities or by engaging in any asset management activities.

In summary, the more prudent course of action for this applicant would be to first determine whether their work experience includes 3 years of asset management experience and then decide whether to take the HKSI LE Paper 6 exam.

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:

Phone +852 2110 9644 Email: info@2cexam.com Wechat: hk2cexam WhatsApp: +852 9347 2064

Please support us by leaving comments and likes if you think this article helps you!

You can scan or click on the QR codes to visit our social media.

Latest Article

Categories

過往文章

Contact US

  • Phone:

    +852 2110 9644

  • Email:

    info@2cexam.com

  • WhatsApp

    +852 9347 2064

  • WeChat

    hk2cexam

Interesting Articles

What is an IIQE license?

May 11, 2021

How to register for the exam? How to prepare? Isn’t the IIQE test score a license?! Obtaining a passing score in the IIQE (Insurance Intermediaries Qualifying Examination) held by the Institute of Professional Education and Knowledge (VTC PEAK) is one of the requirements for applying for an insurance practitioner license. Since PEAK is a statutory…

What is the HKSI license?

May 11, 2021

How to register for the exam? How to prepare? What?! The HKSI exam result is not a license? HKSI, Hong Kong Securities and Investment Institute’s designated LE’s (Licensing Examination, Qualifying Examination) passing result is one of the competency requirements for applying for a license to become a representative and/or responsible officer. However, HKSI is a…

What exactly is a Hong Kong securities license?

May 11, 2021

Is it an HKSI license or an SFC license or an HKMA license? What is the 178 license?  We often hear people mention the 178 license, what does that mean exactly? In fact “178 license” is a common misnomer. 178 does not refer to a license, but a combination of exam papers that need to…

Insurance Intermediary Qualification Examination (IIQE) Exemptions

May 4, 2021

Type A & B of exempted applicants According to Insurance Authority’s Insurance Intermediaries Quality Assurance Scheme (IIQAS), There are 5 types (A, B, C, D, E) of individuals who could be exempted from the IIQE requirement. Type A individuals could be exempted from IIQE Paper 1 (Principles and Practice of Insurance), IIQE Paper 2 (General…

What Is the Difference Between SFC License And HKMA License?

May 4, 2021

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…

What is the validity period of the HKSI LE Hong Kong Securities Examination results?

May 4, 2021

If you ever asked the questions above, then this article is specially written for you! In order to better comprehend the specification of HKSI’s licensing details, we must first clarify the relationship between the various institutions. HKSI is the abbreviation for Hong Kong Securities and Investment Institute. If you ever considered obtaining license(s) for securities-related…

HKSI LE Exemption

May 4, 2021

Let’s talk about Exemptions: Hong Kong Securities and Investment Institute (HKSI) Licensing Examination Paper 7,8,9,11,12 – Common Misunderstandings we all have when it comes to comprehending the Hong Kong Securities and Investment Institute’s (HKSI) exemption methods and requirements.  Able to Have Exemptions from HKSI Examination Papers 7 to 12 By fulfilling any of the following…

What is the validity period of the EAQE/SQE exam?

April 28, 2021

As a city with a dense population, Hong Kong’s property prices continue to be extremely lucrative. With each buying and selling transaction involves several million, being a real estate agent is a way for many people to make a fortune. Imagine how selling only one deal monthly can already enable you to have a comfortable…

What is the validity period of IIQE test results?

April 28, 2021

“If you have money, buy insurance, if you don’t have money, you can sell insurance.” I wonder if you have heard of this saying. Many people rely on insurance to support themselves and their families. Before entering the industry to sell insurance, you need to take at least 2 Insurance Intermediaries Qualifying Examination (IIQE) exam…