Hong Kong traditional finance & virtual assetsLicense application and compliance implementationHong Kong Financial and Virtual Asset License Application and Compliance Implementation

The nature of the business must be assessed in accordance with the regulated activities defined in Schedule 5 of the Securities and Futures Ordinance (SFO, Cap. 571). If the business involves security token trading, SFC Type 1 and Type 7 licenses are required; if it involves trading in non-security tokens such as Bitcoin and Ethereum, a VASP license (according to AMLO Cap. 615) is required. If a compliance structure or trust services are required, a TCSP license is required from the company's registry. In practice, most virtual asset transactions require a "triple license" combination: SFC Type 1, Type 7, and VASP licenses. Aiying can provide you with a free license requirement assessment.

According to the SFC's Fit and Proper Guidelines, ROs must meet the following core requirements: (1) at least 3 years of relevant industry experience and 2 years of management experience; (2) passing the relevant Hong Kong Securities and Investment Institute (HKSI) qualification examination; (3) no criminal record or adverse regulatory record; and (4) for businesses dealing with virtual assets, the RO must also possess professional assets. Each licensed corporation requires at least 2 ROs, and at least 1 of them must be an executive director. Aiying provides precise RO headhunting and qualification pre-assessment services to ensure that candidates are 100% compliant with SFC requirements.

The core difference lies in whether or not client assets are held. "Large License" (holds client assets): Minimum paid-in capital of HK$500 million and working capital of HK$3 million, requiring a robust client asset custody system; "Small License" (does not hold client assets): No paid-in capital required, working capital only HK$10. Recommendation: If you only provide investment management advice and do not directly manage client funds, applying for a "Small License" significantly lowers the capital threshold; if you need to directly manage client assets (such as operating funds), you must apply for a "Large License".

Under the Anti-Money Laundering Ordinance (AMLO, Cap. 615), VASP applicants must meet the following capital requirements: (1) paid-up share capital of not less than HK$500 million; (2) sufficient working capital to sustain the company's operating expenses for not less than 12 months; and (3) insurance or indemnification arrangements to protect client assets. Furthermore, if applying for both SFC Type 1 and Type 7 licenses ("dual licenses"), the capital requirements for each license must be met separately. The actual required capital is usually much higher than the statutory minimum; therefore, thorough financial planning in advance is recommended.

This is Hong Kong's unique "dual licensing" system. SFC License 1 (under SFO) regulates trading in traditional securities and "security tokens"; the VASP license (under AMLO) regulates trading in "non-security tokens" such as Bitcoin and Ethereum. Since most exchanges offer trading in both types of tokens, they need to hold both types of licenses. Furthermore, if an exchange operates an automated trading system, it also needs to apply for an SFC License 7, forming a "triple licensing" combination. Aiying can assist you in planning the optimal license combination.

Yes, but you must strictly comply with the SFC's investor protection requirements: (1) A comprehensive knowledge assessment must be conducted before opening an account; (2) Only highly liquid, large-scale virtual assets (such as BTC and ETH) that meet the SFC's inclusion criteria can be offered; (3) Reasonable trading limits and risk warnings must be set; and (4) A robust customer complaint handling mechanism must be in place. For professional investors, a wider range of virtual asset trading services can be offered.

No. Hong Kong Customs has clearly stated that the MSO (Money Services Operator) license only applies to the exchange and remittance of legal tender and does not cover virtual asset transactions. Virtual asset OTC businesses need to pay attention to the upcoming VA Dealing licensing system. Before the new system takes effect, a compliant trust structure built through a TCSP license can be used as a transitional solution. Aiying advises OTC business operators to prepare for compliance in advance to avoid enforcement risks after the new regulations take effect.

Existing licensed institutions do not need to apply for a new license from scratch. They only need to apply to the SFC to amend the Variation of Licence Conditions and prove that their systems and risk controls meet the SFC's Virtual Asset Terms and Conditions (VA Terms and Conditions) to operate compliantly. The specific steps include: (1) assessing the gap between the existing compliance system and the VA T&Cs; (2) upgrading internal systems and risk control measures; (3) submitting the amendment application and supporting documents to the SFC; and (4) cooperating with the SFC's review and responding to inquiries. The entire process usually takes 3-6 months.

Depending on the complexity of the license: SFC licenses 1, 4, and 9 typically take 6-12 months; VASP licenses, due to the involvement of complex independent system audits (including cybersecurity assessments), typically take 18-24 months; TCSP licenses are faster, taking approximately 2-4 months; stablecoin issuer licenses are under a new system and are yet to be determined. Key factors affecting the processing time include: completeness of materials, qualifications of RO candidates, and the number of SFC inquiry rounds. Adopting Aiying's "pre-screening mechanism" can effectively shorten the number of SFC inquiry rounds and accelerate the review process.

Yes, but the compliance deficiencies from the previous rejection must be thoroughly resolved, and the reapplication record will be kept on file by the SFC. Common reasons for rejection include: RO (Responsible Owner) qualifications not meeting requirements, insufficient business plan, and significant deficiencies in the compliance system. To avoid leaving a negative record, it is recommended to use Aiying's "pre-screening mechanism"—this mechanism, through rigorous pre-submission mock reviews (participated by former SFC examiners), has successfully reduced clients' license rejection rates by 67%.

Acquiring a license involves a change of substantial shareholders, requiring the submission of application documents such as Form A to the SFC. The SFC's approval process typically takes 3-6 months, during which time the target company must maintain normal operations. Key areas of review include the financial strength and business reputation of the new major shareholder, and the qualifications of the proposed management team. Aiying has extensive experience in license acquisition matching and can assist you in selecting suitable target licenses and handle the entire approval process on your behalf.

Yes. According to the HKMA (Hong Kong Monetary Authority) policy, fiat currency stablecoin issuers that were already substantially operating in Hong Kong before the Stablecoin Ordinance came into effect on August 1, 2025, may apply for a transitional arrangement to gradually achieve compliance if they meet certain conditions (including having submitted a letter of intent to the HKMA). The specific length of the transitional period will be determined by the HKMA on a case-by-case basis. Existing issuers are advised to communicate with the HKMA as soon as possible and begin compliance preparations.