Name
Global FinTech Guide
Country _ Name
Hong Kong
SectionTitle
Financial advisory and broking services including robo advisory and auto-trading
Body
FinTechs belonging to this category offer advisory and broking services for investments usually via an internet platform.

Robo advisory services usually offer an investment proposition following a series of questions concerning the personal financial background and the risk-bearing capacity of the user. Sometimes the respective platform also enables the user to directly execute the proposed investment. 

Auto-trading concerns all services which automatically trade on behalf of the customer according to his or her specifications.

Apart from that some FinTechs collect and offer merely or as an ancillary service market information or operate comparison portals to increase the transparency of the capital markets and to help the investor with his decision-making.

There are also FinTech-advertising-services which advertise various financial services or products.


Introduction

Attitude of the country towards modern financial advisory and broking services

The Hong Kong social and political climate is conducive to the development of modern financial advisory services.


Legal affairs

Obligations and requirements to provide financial advisory and broking services, or ancillary services described above

A company carrying on a business in financial advisory and related broking services would have to be licensed by the SFC. The type of licence required would depend on the regulated activity to be performed; in general, a Type 1 (dealing in securities) and/or Type 4 (advising on securities) licence would be required. Certain exemptions may be applicable, which would generally depend on the exact nature of the activities and scope of business operations.

The SFC has comprehensive requirements on how to obtain a licence and comply with the relevant regulatory obligations, including the requirements on financial reserves. The core statutory requirements are found in the SFO, subsidiary legislations and the codes, guidelines, circulars, and other forms of guidance published by the SFC from time to time. See its website: https://www.sfc.hk. Information about the costs of different licence applications is also available on the website.

In respect of the provision of VA advisory services, the Joint Circular provides that intermediaries which intends to provide VA-related advisory services are required to seek SFC's prior approval and are subject to additional requirements set out in a proforma terms and conditions under the Joint Circular.

Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech’s must be aware of in this business area

Part IV of the SFO of Hong Kong regulates offers of investments to the public.

Platform operators of financial advisory services should ensure that their online platforms are properly designed and have appropriate access rights and controls to ensure compliance.
The SFC has issued specific guidelines targeting online platforms and robo-advisory services.

SFC licensees who advise on securities should take note of the SFC's suitability requirements and the anti-money laundering and counter-terrorist financing laws which cover their customer due diligence obligations.


Economic conditions

Market size for financial advisory and broking services as well as adjacent services and biggest companies in this business area

There is no publicly available information. Overall, the whole financial services sector accounted for 24.9% of Hong Kong's nominal GDP at basic prices at HK$2,916,461 million as of 2023. In the fiscal year of 2022/2023, the Inland Revenue Department levied HK$11,380,912,000 from the investment and finance sector (excluding banking) when Hong Kong is taxing at the corporate tax rate of 16.5%.

Additional comments regarding the economic situation for financial advisory and broking services as well as adjacent services or what FinTech’s must be aware of in this business area

N/A

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