SFC · Hong Kong
Securities and Futures Commission
A demanding regulator with one of the highest capital bars in the world for forex, which is why only a small number of firms hold a leveraged FX licence.
- Retail leverage
- Retail leveraged FX capped at 20:1 (5% margin).
- Compensation
- The Investor Compensation Fund covers exchange-traded securities and futures (up to HK$500,000 per investor), not OTC leveraged FX.
- Capital
- Type 3 (leveraged FX) licensees need HK$30 million paid-up capital and HK$15 million liquid capital.
- Supervision & substance
- Licensed corporation with SFC-approved responsible officers, client-money segregation, and regular financial reporting and inspections.
- Stocks, futures & crypto
- Separate SFC licence types cover stocks (Type 1) and futures (Type 2). Since 2023 the SFC has licensed crypto trading platforms, and retail clients may trade on licensed platforms only.
- Trade-off
- Very few licensees, low leverage, and FX compensation does not extend to OTC accounts.
What it means for you: If a firm genuinely holds a Type 3 licence, it has cleared one of the toughest capital tests in the industry.
Common questions about SFC
Is SFC a good regulator for forex brokers?
In our view, SFC is a top-tier regulator (Tier 1 · Top-tier onshore). A demanding regulator with one of the highest capital bars in the world for forex, which is why only a small number of firms hold a leveraged FX licence. If a firm genuinely holds a Type 3 licence, it has cleared one of the toughest capital tests in the industry.
What leverage can brokers regulated by SFC offer retail clients?
Retail leveraged FX capped at 20:1 (5% margin).
Is there a compensation scheme if a broker regulated by SFC fails?
The Investor Compensation Fund covers exchange-traded securities and futures (up to HK$500,000 per investor), not OTC leveraged FX.
Does SFC regulate stocks, futures, or crypto?
Separate SFC licence types cover stocks (Type 1) and futures (Type 2). Since 2023 the SFC has licensed crypto trading platforms, and retail clients may trade on licensed platforms only.
A licence only protects you if your account is with the entity that holds it. Many broker groups hold several licences and onboard clients through an offshore entity. Check your client agreement, and verify the licence on the regulator's own register.
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Tier 1 · Top-tier onshoreWe have done the broker homework.
See which brokers made our shortlist, the entities and licences behind each one, and member pricing.
Tiers and ratings are M1 Strategic's own assessment, based on public sources listed in our regulator guide. Rules change: always verify with the regulator directly. Not financial advice.