The Hong Kong Securities and Futures Commission (SFC) has granted digital wealth firm Lu International in Hong Kong (Lui HK) a Type 1 (dealing in securities) licence, which enables the firm to trade shares, bonds and mutual funds for individual investors.
With the licence, the subsidiary of Shanghai-based Lufax Holding can now provide online investment and wealth management services for retail customers in Hong Kong.
It already held Type 4 (advising on securities) and Type 9 (asset management) licences. According to regulatory requirements in Hong Kong, financial institutions must have Type 1, Type 4 and Type 9 licenses in order to offer wealth and asset management services.
Additionally, its LUI HK app, an online wealth management platform for Hong Kong residents, is expected to go live in August.
Increased range of products
“The licenses enable us to directly operate in Hong Kong. After the launch of the LUI HK app, we will introduce more Hong Kong dollar and US dollar wealth management products. The app will enable Hong Kong clients to access online investment and wealth management services [and] a diverse product portfolio,” said Cai Hua, head of Lui HK.
The firm hopes to attract clients from the growing wealth management market in the Guangdong-Hong Kong-Macao Greater Bay Area.
Lufax Holding had 44.02 million registered users on its Mainland China platform as of the end of last year, according to the company.
Regional expansion
Hong Kong is the second stage in the overseas business expansion of Lufax, which is owned by Ping An Insurance.
In July 2017, Lu International (Singapore) Financial Asset Exchange was rolled out in the Lion City after gaining a capital market services (CMS) licence from the Monetary Authority of Singapore (MAS), which awarded Lui International a recognised market operator (RMO) licence to provide services to Singapore residents in February last year.
The firm unveiled its Lu Global online platform in Singapore in September 2018, which was targeted to accredited investors in the country and to mass-affluent investors in Southeast Asia.
The minimum investment is $1,000 (£800, €885) and an aggregation process means that investors can buy complex products, such as private equity and structured notes, which they wouldn’t normally be able to purchase because the minimum dealing size is too restrictive, Kit Wong CEO of Lu International, told our sister publication Fund Selector Asia last year.
Traditional wealth managers, as well as fund distributors, throughout the world are facing growing competition from online services and robo-advisers, and are being forced to upgrade their digital products.
Meanwhile, big technology groups, such as Amazon and Alibaba, are expected to enter the wealth management sector in the coming years, posing a threat to established advisory companies and offering customised services to investors, according to the Boston Consultancy Group’s latest annual Wealth Report.
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