A New Approach To The Licensing Of Private Equity Sponsors?

On January 7, 2020, the Securities and Futures Commission (SFC) issued its “Circular to private equity firms seeking to be licensed” (PE Circular) setting out its view on the licensing obligations of private equity firms. The PE Circular suggests that a number of activities frequently undertaken by private equity firms may trigger licensing obligations and as a result, private equity firms operating in Hong Kong without a licence will need to consider their scope of activities and whether or not they do, in fact, wish to run the risk of operating without a licence. The PE Circular appears to confirm that the SFC’s historically relaxed approach to the licensing of private equity firms has now possibly changed.