1. Private Securities Funds (Private Equity / Securities-Focused Fund)

Overview
A private fund set up in an offshore jurisdiction (e.g. Cayman, BVI) invests mainly in Hong Kong or overseas listed securities. It requires an investment manager (management team) in Hong Kong to make investment decisions.

• Big 9 – Is it possible?
  Yes. If the firm has permission to hold client assets and meets higher regulatory requirements (e.g. capital, risk controls), it can become the direct fund manager. Funds may be sent to the firm or its designated fund account. However, in practice, private funds usually still place their assets with an independent custodian.
• Small 9 – Is it possible?
  Yes. Typically, a third-party custodian or broker holds the fund’s assets, and the Small 9 firm only handles investment decisions and trade execution. This approach is very common, as it avoids higher capital requirements for the manager.

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2. Multi-Family Office / External Asset Management (EAM)

Overview
Provides discretionary asset management services to multiple high-net-worth families or individuals. Client assets are usually kept in private bank or brokerage accounts, and the family office/EAM is in charge of trading decisions.

• Big 9 – Is it possible?
  Yes, but in practice, there is rarely a need to hold client assets directly. Clients generally prefer to keep funds in a bank or custodian they trust.
• Small 9 – Is it possible?
  Very common. The “cannot hold client assets” restriction does not hinder EAM services. Client funds stay in their own separate custody accounts, and the manager simply provides the discretionary management and sends trade instructions.

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3. Single-Family Office

Overview
Manages the assets of one ultra-high-net-worth family. Some single-family offices operate without a licence, but if they manage external capital or multiple accounts (i.e., “managing securities/futures portfolios on behalf of another”), a Type 9 licence may still be required.

• Big 9 – Is it possible?
  Yes. However, many single-family offices do not need to hold client assets because the family usually keeps assets at a private bank.
• Small 9 – Is it possible?
  Yes. If the office only serves one family and does not touch the assets, simply providing investment decisions can be enough.

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4. Sub-Manager / Investment Advisor for an Overseas Fund

Overview
An overseas fund (e.g., Cayman, EU) already has a primary manager based in the US/Europe. It sets up a Hong Kong “sub-manager” or “investment advisor” to handle certain investment or research duties.

• Big 9 – Is it possible?
  Yes. If the Hong Kong entity actively manages the fund and may hold or control the fund’s assets, then it needs the ability to hold client assets.
• Small 9 – Is it possible?
  Also feasible—and more common. The main manager usually signs agreements with a global custodian or main fund bank, so the Hong Kong sub-manager does not touch the assets. It mainly conducts investment research and executes trades.

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5. Public (Retail) Fund Management

Overview
Offers unit trusts, mutual funds, or other retail-oriented funds to the general public in Hong Kong. This requires a Type 9 licence that allows service to non-professional investors.

• Big 9 – Is it possible?
  Yes, but the manager must meet higher standards set by the SFC for “retail fund managers,” such as:
  • No “professional investors only” restriction,
  • Sufficient financial resources (capital, liquidity, insurance),
  • Robust compliance and risk management systems.
• Small 9 – Is it possible?
  Usually not. Small 9 licences often come with conditions such as “professional investors only” or “not permitted to manage collective investment schemes (CIS).” For true retail funds, those restrictions must be lifted, and more stringent SFC requirements must be satisfied.

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6. Hedge Fund Management

Overview
Manages long/short, quantitative, or other hedge fund strategies, often involving both securities and futures. Assets are typically kept with global custodians or prime brokers.

• Big 9 – Is it possible?
  Yes. However, if the fund trades futures, make sure the licence does not include “not permitted to manage futures contracts.” Also, to hold client assets in one account, the firm must meet higher capital requirements.
• Small 9 – Is it possible?
  Yes. The manager can handle the securities side. If futures are allowed (i.e., no “no futures” restriction), it can also include futures. In most cases, the fund is held with a third-party prime broker, and the manager just places trades.

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7. Exchange-Traded Fund (ETF) Management

Overview
ETFs listed on the Hong Kong Stock Exchange typically require a Type 9 licence (and possibly others, like Type 1) to issue and manage the product.

• Big 9 – Is it possible?
  Yes, but managing ETFs (a retail product) demands meeting the SFC’s higher requirements for public funds, plus formal approval to list the ETF.
• Small 9 – Is it possible?
  Usually not, because ETFs target retail investors. If a Small 9 licence has “professional investors only” or “not allowed to manage CIS,” it cannot manage an ETF.

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8. Discretionary Mandates for Institutions / Professional Investors Only

Overview
Providing individual discretionary account management for insurance companies, banks, asset managers, or high-net-worth individuals who meet the “professional investor” definition.

• Big 9 – Is it possible?
  Yes. Big 9 licences do not restrict this type of clientele. However, holding the assets itself is not mandatory.
• Small 9 – Is it possible?
  Yes, as long as your licence conditions permit dealing with professional investors, and assets are kept with third-party custodians.

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9. External Investment Advisor + Research / Portfolio Decisions

Overview
Certain funds or institutions have their own core team but want a licensed external manager to provide investment advice or even execute trades under a discretionary agreement.

• Big 9 – Is it possible?
  Yes, especially if the manager is expected to hold assets or fully operate accounts. If only advisory services are provided, you must check whether you need Type 4 (advising on securities) or Type 9 (discretionary management).
• Small 9 – Is it possible?
  Yes. If you only act as an advisor and do not hold client assets, Small 9 is enough. The client’s assets remain at the client’s own bank or broker.

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10. Real Estate Securities / REITs Fund Management

Overview
Investing in listed real estate investment trusts (REITs) or real estate-related securities (rather than directly acquiring property) still requires a Type 9 licence for full discretionary management.

• Big 9 – Is it possible?
  Yes. A Big 9 does not restrict the type of assets. If the REIT targets retail investors in Hong Kong, you must also comply with the relevant public offering requirements.
• Small 9 – Is it possible?
  Yes, if there is no plan to raise funds from retail investors and custody is handled by a third party. Many real-estate-focused funds only accept professional investors, so a Small 9 is typically sufficient.

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11. Private Debt / Credit Funds

Overview
Focuses on private debt, convertible bonds, corporate bonds, etc., possibly involving Hong Kong-listed or overseas bonds. If mostly bond-based, a Type 9 licence is still required to manage these securities portfolios.

• Big 9 – Is it possible?
  Yes. If you want to pool and hold all client funds under the manager, you need the relevant capital and custody arrangements.
• Small 9 – Is it possible?
  Yes. Most credit funds use a third-party custodian, and they usually target professional investors, so a Small 9 licence suffices.

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12. Quant Hedge / Systematic Trading Funds

Overview
Uses quantitative or algorithmic models to trade in Hong Kong or global markets, possibly using futures or derivatives for hedging.

• Big 9 – Is it possible?
  Yes, provided your licence does not prohibit managing futures contracts. If you want to handle retail clients, the licence requirements are stricter.
• Small 9 – Is it possible?
  Yes, as long as the licence does not forbid futures management (if needed) and client assets are held by a third party. Typically, these funds cater to professional investors.

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13. Pension or Retirement Fund Management

Overview
Some corporate retirement schemes or pension plans hire external managers for their investment portfolios. If Hong Kong-listed securities/futures are involved, a Type 9 licence is required.

• Big 9 – Is it possible?
  Yes, if you intend to receive and centrally manage a large amount of client funds and hold them under the manager’s name.
• Small 9 – Is it possible?
  Also possible, as long as the pension plan or retirement fund has a third-party custodian account, and the manager provides investment decisions only.

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14. Insurance Mandate Asset Management

Overview
Insurance companies sometimes outsource a portion of their own funds or premium pool to external asset managers. Insurance companies typically qualify as professional investors.

• Big 9 – Is it possible?
  Yes, if the firm meets the requirements to act as a trustee/manager holding the assets. If the insurance company’s funds are to be pooled in the manager’s account, higher capital requirements apply.
• Small 9 – Is it possible?
  Yes. Insurance companies generally have their own custodians or designated accounts, so they do not need the external manager to hold their assets.

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15. ESG / Impact Investment Funds

Overview
Invests in listed companies or bonds with strong environmental, social, or governance (ESG) factors. This is still essentially managing securities/futures portfolios.

• Big 9 – Is it possible?
  Yes. The underlying process is similar to any other securities fund—just with an ESG focus.
• Small 9 – Is it possible?
  Yes. As usual, a third-party custodian can hold assets. If only professional investors are involved, it is straightforward.

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16. Allocating a Small Portion to Virtual Assets (≤10% of AUM)

Overview
A traditional fund wants to diversify by investing in a limited amount of cryptocurrency (e.g., Bitcoin), but less than 10% of its Assets Under Management (AUM).

• Big 9 – Is it possible?
  Yes. You must follow the SFC’s guidelines on virtual asset risk disclosure and ensure that management has adequate expertise.
• Small 9 – Is it possible?
  Yes, if the virtual asset portion does not exceed 10%. In that case, you do not need the special “virtual asset management” approval, though you still need to maintain proper risk controls.

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17. Dedicated Virtual Asset Funds (>10% of AUM)

Overview
If a fund invests more than 10% of its AUM in cryptocurrencies or digital tokens, the SFC requires you to obtain additional virtual asset management approval on top of your existing Type 9 licence.

• Big 9 – Is it possible?
  You must apply for this special approval under the SFC’s virtual asset guidance. Merely having a Big 9 licence is not sufficient on its own.
• Small 9 – Is it possible?
  Theoretically yes, but you also need to apply for the same special virtual asset approval to exceed the 10% limit. Whether you can “hold client assets” depends on your licence conditions and custody arrangements.

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18. Branch Office in Hong Kong for an Overseas Hedge Fund

Overview
A hedge fund headquartered in the US/Europe sets up a Hong Kong office for research, marketing, or partial investment management, particularly for the Asia-Pacific region.

• Big 9 – Is it possible?
  Yes. If the Hong Kong branch has a formal asset management role (signing an investment management agreement) and may hold assets, it needs a Big 9 licence.
• Small 9 – Is it possible?
  More common. The main custody and settlement may remain with the headquarters, while the Hong Kong office simply obtains a Small 9 to handle local research and execution.

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19. Managing Structured Products / Derivatives Portfolios

Overview
Involves warrants, callable bull/bear contracts, over-the-counter derivatives, etc., and may include futures for hedging.

• Big 9 – Is it possible?
  Yes, as long as there is no licence condition prohibiting derivatives (futures/options) management. For retail investors, higher compliance standards apply.
• Small 9 – Is it possible?
  Yes, but check for any conditions like “not permitted to manage futures contracts” or “professional investors only.” If you plan to invest in futures, those conditions must be removed first.

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20. Managing Charitable Foundations / Family Trusts

Overview
Certain charitable foundations or family trusts may engage an external manager to handle their portfolios on a discretionary basis. These entities usually qualify as professional investors.

• Big 9 – Is it possible?
  Yes. If the foundation/trust wants the manager to pool and operate the assets directly, a Big 9 licence can accommodate that. In practice, they often still use an independent custodian.
• Small 9 – Is it possible?
  Yes. You simply operate under “not holding client assets,” while the charity/family trust opens and maintains its own bank or brokerage accounts.

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Summary

For most private funds, family offices, and external asset management (EAM) businesses, a “Small 9” licence (not permitted to hold client assets) is usually sufficient. They generally rely on third-party custodians rather than having the asset manager hold client funds or securities.

Only in cases where you target retail investors (public funds) or need to collect and safeguard client assets yourself (e.g., certain structures or client requests) would you lean towards a “Big 9” licence (permitted to hold client assets). In those instances, higher requirements apply for financial resources, compliance, risk management, and the qualifications of responsible personnel.

Additionally, when it comes to futures contracts, providing services to non-professional investors, managing collective investment schemes (CIS), or allocating a large proportion to virtual assets, the SFC often imposes extra conditions or restrictions on the licence. Before you start any business activity, always review the conditions on your licence. If you need extra permissions, you must apply to the SFC to remove or modify those conditions.

For an overseas fund setting up a sub-manager in Hong Kong, a Small 9 licence is most common. If the business later expands to raise funds locally or hold client money in Hong Kong, you can consider “upgrading” to a Big 9 or seeking to vary your existing licence conditions.

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Disclaimer: This information is for general reference only and does not constitute legal, compliance, or investment advice. Always consult professional advisers (lawyers, compliance experts, or accountants) and refer to the latest rules and approvals from the Hong Kong SFC.