Hong Kong is a city-state in China, which is part of the country as a district with a government and many, fully or partly, independent institutions. The Hong Kong Dollar is a significant Asian currency, being the eighth most traded currency in world of Forex markets. Strictly regulated, it’s also an important offshore market to Chinese Yuan, forming a rather complicated and big foreign currency exchange market.

Strong Ties to International Market

Hong Kong SFC logoThe economy of Hong Kong depends significantly on international cooperation. Therefore, Hong Kong’s primary focus was to become a major financial center and to maintain that status. The low taxes attract many investors and Forex companies to benefit from the lucrative offers. The Hong Kong economy is an open-type economy and known for being a host to many international companies. The national currency is the Hong Kong dollar which is pegged to the USD in the ratio 1,75527 HKD = 1 USD. The issuance of the HKD relies heavily on the USD reserves, which indicates that the USD backs up the HKD. The HKD cannot be issued if there is no corresponding amount of USD as deposit. Also, it is not used as a reserve currency in Asia unlike the Japanese Yen. Still, the HKD is one of the top rated currencies in the Forex market which indicates its importance in the industry. Maybe one of the reasons is that the interest rate on the HKD is significantly lower. Despite being one of the tradable currencies in Forex, it is speculated that the HKD will cease to exist when China allows the Chinese currency Yuan to float freely. According to speculation, this is very likely to happen, moreover, it is inevitable.

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The SFC Regulation

The Hong Kong Securities and Futures Commission was formed in 1989 as an operationally independent government body in an attempt to strengthen the market and provide a consistent securities and futures environment. The HK SFC was set up as a policymaking commission also enforcing the regulations, by actively supervising the financial sector, including the HKSFC regulated brokers. The Forex brokers in Hong Kong are licensed and supervised by the SFC, authorized by the Securities and Futures Ordinance and other appropriate legislation. With investigative departments as well as disciplinary sanctions available, the HKSFC is an active regulator working with an ultimate goal to promote and safeguard the integrity of the Hong Kong market. The SFC is independent from the state budget and financed through transaction levies and licensing fees. The SFC’s mission is to maintain a sound securities and futures market protecting the interests of traders, investors, companies, and other market participants. As other supervisory bodies, the HK SFC has also the power to investigate misconduct and manipulative activities of the companies. It also assumes the role of market educator by spreading the awareness of market risks, rights, and responsibilities.

Policies of the SFC

The Hong Kong Commission makes an effort to be firm but fair. The SFC makes known that it will not hesitate in taking actions when suspicious actions are in place, but they will neither bother brokers for no reason nor harm their reputation in any way. The Commission is also involved in risk assessments and strives to impose higher requirements to reduce the risks. The SFC is a partner in business to its regulated entities. They maintain close relationships with the SFC licensed companies, and cooperate with other regulatory bodies (three other regulators in Hong Kong) to create an optimal climate for business deals. They also try hard to transfer their principles into visible actions through implementation of guidelines, rules and laws. They also rather rely on negotiations and open dialogue with their partners than dictatorship to achieve desired results.

Top HKSFC Brokers

Forex brokers in Hong Kong are high-quality companies with strict regulation and an established system where the licensed brokers are widely trusted and giving a consistent service. The transparency and efficiency are emphasized and constantly monitored by the HKSFC, who function as an official but operationally independent regulatory body. The Hong Kong Securities and Futures Commission keep an up-to-date website and you can always contact the agency to consult on any regulatory ambiguities and HKSFC regulated brokers’ issues. This proves the effort the HK government invests in providing the stability and the well-being of the securities and futures markets, including the Foreign exchange market. This provides a protection for the traders and a systematic risk reduction which reinstates Hong Kong as one of the top Forex markets. Top Hong Kong Forex brokers offer the same benefits and perks that are offered in Europe and the USA which are in line with the national regulation. Traders registered with the best Hong Kong brokers have access to the best trading platforms, get paid on time (if they made profits), can use different e-wallets and other payment methods for deposits and withdrawals, and finally, they are linked to the best price quotes in the market.

Other Forex market regulators

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CSSF regulated Forex brokers DFSA regulated Forex brokers EFSA regulated Forex brokers
CMBT regulated Forex brokers CMVM regulated Forex brokers CNB regulated Forex brokers