Securities And Futures Commission Of Hong Kong (SFC) Brokers 2024
The Securities and Futures Commission of Hong Kong (SFC) is an independent body in charge of regulating brokers and protecting retail investors. This guide will list the top brokers authorized by the SFC. We also explore the SFC’s history, structure and public register, as well as the responsibilities and powers it levies on financial entities.
Best SFC Brokers
These brokers comply with financial safeguards to provide traders from Hong Kong with secure investing conditions:
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1Interactive Brokers
Ratings
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFMStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
2MoomooGet up to 15 free stocks worth up to $2000
Ratings
$0$01:2SEC, FINRA, MAS, ASIC, SFCStocks, Options, ETFs, ADRs, OTCsDesktop Platform, Mobile AppWire Transfer, ACH TransferUSD, HKD, SGD
Here is a short summary of why we think each broker belongs in this top list:
- Interactive Brokers - Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
- Moomoo - Moomoo is an SEC-regulated app-based investment platform that offers a straightforward and affordable way to invest in Chinese, Hong Kong, Singaporean, Australian and US stocks, ETFs and other assets. Margin trading is available and the brand offers a zero-deposit account as well as several bonuses.
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
Demo Account | Yes |
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Instruments | Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies |
Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
Minimum Deposit | $0 |
Minimum Trade | $100 |
Leverage | 1:50 |
Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.
- IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
Cons
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
Moomoo
"Moomoo remains an excellent choice for new and intermediate stock traders who want to build a diverse investment portfolio. What really stands out is the broker's user-friendly app and the low trading fees."
Jemma Grist, Reviewer
Moomoo Quick Facts
Bonus Offer | Get up to 15 free stocks worth up to $2000 |
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Demo Account | Yes |
Instruments | Stocks, Options, ETFs, ADRs, OTCs |
Regulator | SEC, FINRA, MAS, ASIC, SFC |
Platforms | Desktop Platform, Mobile App |
Minimum Deposit | $0 |
Minimum Trade | $0 |
Leverage | 1:2 |
Account Currencies | USD, HKD, SGD |
Pros
- Moomoo's analytics and insights are impressive and detailed compared to other brands
- Moomoo is a Member of FINRA and the Securities Investor Protection Corporation (SIPC), adding another level of security for prospective clients
- There is no minimum deposit requirement making the broker accessible for beginners
Cons
- There is no negative balance protection, which is a common safety feature at top-tier-regulated brokers
- There is no phone or live chat support - common options at most other brokers
- It's a shame that there is no 2 factor authentication (2FA), despite the other security features on offer
Background & History Of The SFC
The Securities and Futures Commission (SFC) is fundamentally responsible for administering, overseeing and regulating the securities and futures markets of Hong Kong. While it is considered a branch of the government, it operates independently and works to boost Hong Kong’s status as an international financial centre.
The entity’s head office address is 54/F One Island East, Quarry Bay in Hong Kong.
Before 1971, all markets in Hong Kong were unregulated. In 1973, after a stock market crash, legislation was passed to introduce a system to supervise the stock and commodity trading industry.
A further stock market crash in 1987 saw the formation of an advisory committee with six members. The committee recommended that a single, independent statutory body should regulate the markets and, in May 1989, the Securities and Futures Commission Ordinance was enacted. This created a new regulatory framework for Hong Kong, ultimately leading to the opening of the SFC.
Activities & Purpose
According to the Securities and Futures Commission’s website, its primary activities include:
- The setting and enforcement of market regulations, plus the investigation of breaches or misconduct.
- Licensing and supervising market participants that fall under the SFC’s market responsibility.
- Managing market operators, such as exchanges, clearinghouses, share registrars and alternative trading platforms.
- Authorising investment products and providing associated documents to investors.
- The takeovers and mergers panel of the securities and futures commission oversees any takeovers of public companies and the Stock Exchange of Hong Kong.
- Assisting local and overseas regulatory authorities, such as those in Korea and Taiwan.
- Educating investors on markets and risks, plus their rights and responsibilities.
Similar to regulatory bodies in the USA, UK and Singapore, the purpose of the Securities and Futures Commission of Hong Kong (HK) is to ensure safe and successful practices among customers and financial service providers. To achieve this, policy statements are released by the Securities and Futures Commission, setting out guidelines on topics such as new fees and rules.
Additionally, the SFC provides a public register of any company or broker licensed by the organisation. With this feature, any member of the public can easily find any entity regulated by the Securities and Futures Commission, allowing them to search for relevant information before they trade with a broker. The SFC advisory committee also creates an alert list that warns customers of any brokers or entities that do not hold a license.
Market participants can gain access to occasional circulars from the Securities and Futures Commission, which contain reminders of any regulatory requirements and red flags. Occasionally, releases may relate to enforcement news or updates from Chinese markets.
Structure
The Securities and Futures Commission is led by the board of directors and the chairman of the SFC. Working alongside the Securities and Futures Commission board is a series of committees overseeing various responsibilities, whilst the CEO and non-executive director manage the commission in a more hands-on sense.
Beneath them is a management team covering all aspects of the Securities and Futures Commission. This includes a corporate finance division, which manages annual reports and revenue. There is also a process review panel for the Securities and Futures Commission, which evaluates the fairness of its internal operations.
Powers
For entities to become successfully licensed, they must satisfy the criteria outlined in the ‘Fit and Proper Guidelines’ that are issued by the Securities and Futures Commission. Any financial service provider that breaks these rules can be subject to a penalty. As such, the SFC has the power to:
- Revoke or suspend SFC licenses
- Issue private or public reprimands
- Ban and prevent people from participating in activities
- Issue fines and penalties, payable by cheque or transfer
Notably, there have been some high-profile cases involving the SFC, including AA & EA vs the Securities and Futures Commission and the SFC vs Tiger Asia Management LLC. In 2020, the SFC fined Goldman Sachs $350 million for its role in the 1Malaysia Development Berhad scandal (1MDB scandal).
Broker Requirements
Any broker wishing to receive a license from the Securities and Futures Commission must use the SFC online portal on the Hong Kong website to register. They must also follow the licensing handbook and provide information relating to:
- Shareholders and shareholding structure
- Proposed business and internal controls
- Management and governance structure
- Financial strength
Criticisms
The Securities and Futures Commission has faced some criticism over the years, particularly concerning licensing examination. Critics stated that the test was not checked or validated independently before being implemented in the examinations. Moreover, no formal appeal practices are in place to check the legitimacy of such examinations.
Final Thoughts On The SFC
The Securities and Futures Commission is responsible for ensuring that Hong Kong’s financial markets are safe and regulated for both customers and financial service providers. To achieve this, the SFC implements a strong regulatory framework and robust enforcement procedures.
Before trading with a broker, investors should always conduct an entity search using the Securities and Futures Commission public register to check whether the company is fully licensed by the SFC.
FAQs
Who Owns The Securities And Futures Commission?
The SFC is a branch of the Hong Kong government. However, it is an independent statutory body led by agency executives and advisory committees.
When Did The Securities And Futures Commission Become Operational?
Following the stock market crash of 1987, a committee of six members was formed, which later created the SFC in May 1989.
Does The Securities And Futures Commission Regulate Banks?
The SFC does not regulate banks. It regulates any financial services provider operating within the securities and futures markets.
How Do I Check If A Broker Is Licensed By The Securities And Futures Commission?
The SFC provides a public register of all licensed companies and brokers. The public can conduct their own company search to check whether a broker is licensed.
Does The Securities And Futures Commission Regulate Forex Brokers?
Yes, the SFC regulates forex brokers. Any company within the securities and futures markets, and operating in Hong Kong, is regulated by the SFC.