The SFC does not license or regulate all "investment advisers". The term "investment adviser" is an undefined and generic term which is generally used to describe intermediaries (individuals or companies) selling and advising on financial products such as securities, insurance contracts, mortgages and deposits.
There are three principal groups of investment advisers in Hong Kong: (1) intermediaries who are licensed by the SFC, (2) banks, and (3) insurance intermediaries.
These investment advisers are subject to different regulatory regimes, depending upon the nature of the particular activities that they are conducting.
SFC-licensed investment advisers
Intermediaries carrying on a business, or holding themselves out as carrying on a business, of advising on securities (e.g. stocks and funds) or futures contracts, are required to be licensed by the SFC under the Securities and Futures Ordinance for Type 4 (advising on securities) or Type 5 (advising on futures contracts) regulated activity. If they sell financial products, which are securities or futures contracts, they are required to be licensed for Type 1 (dealing in securities) or Type 2 (dealing in futures contracts) regulated activity.
To verify whether a firm or individual is licensed with the SFC to conduct regulated activities, you may check the "Public Register of Licensed Persons and Registered Institutions" on the SFC website.
Banks, which are appropriately registered by the SFC under the Securities and Futures Ordinance, may also conduct the regulated activities of advising on, or dealing in, securities or futures contracts. The Hong Kong Monetary Authority (HKMA) is the frontline regulator of banks and their advisory/sales staff. To verify whether bank staff are permitted to conduct regulated activities, you may check the "Register of Securities Staff of AIs" on the HKMA website.
Bank staff may also sell or advise on insurance products, in which case they are separately required to be authorized under the Insurance Ordinance.
Insurance intermediaries, who sell or advise on insurance products (including insurance brokers and insurance agents), are regulated under the Insurance Ordinance. The regulation and supervision of insurance intermediaries is performed by the Insurance Authority (IA).
As ILAS, and units in ILAS, are neither securities nor future contracts, selling or advising on ILAS are not regulated activities under the Securities and Futures Ordinance. Accordingly, insurance intermediaries who conduct these particular activities are required to be authorized under the Insurance Ordinance, but are not required to be licensed by the SFC.
In addition to the conduct of insurance business, some insurance intermediaries may separately conduct the regulated activities of advising on, or dealing in, securities or futures contracts. If they do so, they must also be licensed by the SFC under the Securities and Futures Ordinance.
To verify whether an insurance intermediary is authorized under the Insurance Ordinance, you may check this with the IA's Register of Licensed Insurance Intermediaries.
If you are dissatisfied with any aspects of the conduct of an investment adviser, you can make a complaint. The first step is to raise the matter directly with the company you dealt with. If you are not satisfied with its response, you can refer the matter to the regulatory bodies.
|Type of advisers/intermediaries||Regulator|
|Intermediaries licensed by the SFC||SFC|
|Banks and their advisory/sales staff||HKMA|