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Print articleHong Kong: Streamlining of Licensing Process for Overseas Hedge Fund Managers
June, 2007 -
On 11 June 2007, the Securities and Futures Commission (SFC) issued a circular (http://www.sfc.hk/sfcRegulatoryHandbook/EN/displayFileServlet?docno=H461) outlining a set of initiatives to streamline and simplify its licensing processes. The circular, which provides practical guidance to fund managers intending to apply to the SFC for a licence, is principally directed at overseas hedge fund managers from the US and the UK.
The relaxations outlined in the circular, which will take effect immediately, can be briefly summarised as follows:
• Firms that are already licensed or registered in the US or the UK as investment managers or advisers, and which only serve professional investors and have good compliance records, will benefit from an expedited streamlined licensing process.
• A broader range of relevant industry experience will be recognised as satisfying the competence requirements for Responsible Officers (ROs), including asset management, proprietary trading, research, private equity, special situations, and experience in dealing with other alternative investments.
• Persons nominated to be the ROs of hedge fund managers, who fulfil certain criteria, can be exempted from the local regulatory examination.
The circular reminds overseas hedge fund managers that the SFO exempts Hong Kong based operations from being licensed where they merely provide research to their wholly owned group companies outside Hong Kong and clarifies that the SFC does not prescribe the type of office space managers may occupy and draws no distinction between appropriate serviced offices and other types of business premises.
The SFC invites groups setting up in Hong Kong to meet with them to discuss their licensing requirements.
The relaxations outlined in the circular, which will take effect immediately, can be briefly summarised as follows:
• Firms that are already licensed or registered in the US or the UK as investment managers or advisers, and which only serve professional investors and have good compliance records, will benefit from an expedited streamlined licensing process.
• A broader range of relevant industry experience will be recognised as satisfying the competence requirements for Responsible Officers (ROs), including asset management, proprietary trading, research, private equity, special situations, and experience in dealing with other alternative investments.
• Persons nominated to be the ROs of hedge fund managers, who fulfil certain criteria, can be exempted from the local regulatory examination.
The circular reminds overseas hedge fund managers that the SFO exempts Hong Kong based operations from being licensed where they merely provide research to their wholly owned group companies outside Hong Kong and clarifies that the SFC does not prescribe the type of office space managers may occupy and draws no distinction between appropriate serviced offices and other types of business premises.
The SFC invites groups setting up in Hong Kong to meet with them to discuss their licensing requirements.
