Beware of Your Titles

Everybody knows carrying on "regulated activities" defined under SFO without licence is illegal. But don't you know you would commit an offence even you do nothing but simply using certain titles in your name cards?

Under S114 of SFO prohibits, no one shall "hold himself out" to carry on a business of in a regulated activity without licence. S139 further prohibits the use of the following titles (specified in Schedule 6) for different types of regulated activity:

• Type 1 - "bond broker", "bond dealer", "securities dealer", "stock dealer", "stockbroker", "股票經紀", "債券交易商", "債券經紀", "證券交易商" and "證券經紀"
• Type 2 - "futures broker", "futures dealer", "期貨交易商" and "期貨經紀"
• Type 3 - "leveraged foreign exchange trader" and "槓桿式外匯交易商"
• Type 4 - "securities adviser", "securities consultant", "stock adviser", "股票顧問" and "證券顧問"
• Type 5 - "futures adviser", "futures consultant" and "期貨顧問"
• Type 6 - "corporate finance adviser", "corporate finance consultant" and "機構融資顧問"
• Type 7 - "automated trading service provider" and "自動化交易服務提供者"
• Type 8 - "margin lender", "securities margin financier" and "證券保證金融資人"

There is no prohibited title for Type 9, which appears that use of the title "asset manager" is not illegal. On the other hand, a title containing the term "trader" (e.g. bond trader) is not prohibited. The possible reason is that "trader" implies proprietary trading with professional counterparties, which is usually not regarded as a regulated activity. "Financial planner" is also not prohibited because its definition is too board to denote an adviser on specific product type.

Typically a person may violate S139 by using the above titles in his name cards or self-profile on a website before his licence is granted by SFC.