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Financial advsiors

Charltons provides high impact advice to investment advisory firms, corporate finance advisors, investment research firms, financial planners and other financial advisors on all areas of their operations and through the full life cycle of their businesses.

We help financial advisors to set up and structure their businesses in Hong Kong and assist in the preparation of shareholder and employment agreements.

We advise on SFC licensing requirements, approval criteria and application procedures. We can advise on whether (and what type of) SFC licence is required in a particular case, whether the experience and qualifications of proposed “responsible officers” are sufficient, and identify other issues that may arise during the application process. We will also coordinate the licensing application process, including assisting corporations to draft business plans and compliance and operations manuals, working with clients to respond to queries raised by the SFC, and preparing applications for exemptions or waivers from particular SFC licensing requirements.

We assist financial advisors to draft investment advisory agreements and other client contracts. We advise financial advisors on their on-going obligations as licensed persons, updating compliance manuals, policies and procedures to reflect the evolving Hong Kong regulatory and compliance framework for financial intermediaries, reviewing internal control systems (for example relating to record keeping and staff dealing) and suggesting fixes for identified deficiencies. We assist in establishing client take on procedures, in particular “know-your-client” and anti-money laundering policies, and procedures to verify professional investor status. We can also advise financial advisors on the regulatory implications of offering investment products in Hong Kong.

We have a dynamic capital markets practice with extensive experience in negotiating underwriting and placing agreements in connection with IPOs and follow-on offerings on both the Main Board and the Growth Enterprise Market (GEM) of the Hong Kong Stock Exchange. Our M&A team can advise on restructurings of financial groups involving financial advisory businesses, as well as on M&A and equity financing transactions in which financial advisors are acting for a particular buyer, seller or investor.

Charltons can also assist financial advisors in relation to SFC investigations, enforcement and disciplinary matters. Our experience includes advising SFC licensed corporations on misconduct by employees and advising financial intermediaries on potential unauthorised selling of investment products and carrying on “regulated activities” without proper licensing.

We provide an insightful and highly personalised service to clients, and aim to deliver legal advice on complex issues in plain language. Charltons can offer financial advisors legal advice and a range of legal services. We have experience of SFC licensing requirements and investment advisory agreements.

 

SFC Licensing Requirements for Financial Advisors

A company wishing to advise on securities must be licensed by (or, if it is an authorised financial institution regulated by the Hong Kong Monetary Authority, registered with) Hong Kong’s Securities and Futures Commission for regulated activity Type 4, advising on securities. “Advising on securities” is defined as giving advice on the acquisition or disposal of securities or the issue of analyses or reports for the purpose of facilitating decisions on such acquisitions or disposals.

A company proposing to act as a corporate finance advisor must be licensed (or, in the case of an authorized financial institution, registered)  for regulated activity Type 6, advising on corporate finance.  This is defined as advising:

(a) on compliance with or in respect of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange or the SFC’s Codes on Takeovers and Mergers and Share Buy-backs;

(b) in relation to:

  1. public offers of securities;
  2. offers to acquire securities from the public; or
  3. acceptance of an offer referred to in (1) or (2) where the advice is given generally to holders of securities; or

(c) a listed corporation or public company (or a subsidiary of either) or its officers or shareholders, regarding corporate restructuring of its securities (including the issue, cancellation or variation of rights attaching to securities).

A company wishing to be licensed for regulated activity Type 4 is required to have minimum paid-up share capital of at least HK$5 million and liquid capital of at least HK$3 million. If, however, the licensed corporation is subject to the licensing condition that it cannot hold client assets, there is no minimum paid-up share capital requirement and the amount of liquid capital required is HK$100,000. The requirements for a Type 6 licensed corporation are paid-up share capital of HK$5 million and liquid capital of at least HK$3 million.

A corporate finance adviser who wants to act as the sponsor of companies seeking to list on the Hong Kong Stock Exchange, or as the post-listing compliance adviser to a listed company, must be authorized by the SFC to conduct sponsor work. This requires minimum paid-up share capital of HK$10 million.

Charltons can offer financial advisors legal advice and a range of legal services. We have experience of SFC licensing requirements and investment advisory agreements.

Financial advisors

Investment advisory agreement

SFC licensing requirements

Securities and Futures Commission SFC licensing requirements

Hong Kong financial advisors corporate finance law

SFC licensing requirements and investment advisory agreements

Hong Kong Financial advisors legal advice

Know-your-client and anti-money laundering policies

Legal advice for Hong Kong financial advisors

Regulated activity type 4 advising on securities

Rules Governing the Listing of Securities on the Hong Kong Stock Exchange Listing Rules

SFC Codes on Takeovers and Mergers and Share Buy-backs
Regulated activity Type 6 advising on corporate finance
Investment advisory contract requirements
Hong Kong securities regulator
Hong Kong Investment advisory agreement