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The proliferation of digital platforms has led to a significant and quantifiable increase in retail investing. A 2022 review by the Securities and Futures Commission (SFC) found that just 50 online-focused brokers opened over 3 million new client accounts in a single year, with 96% of these being onboarded digitally.[1] This expanding base of retail investors now constitutes 58% of the general public aged 18-69 according to a 2023 study by the Investor and Financial Education Council (IFEC),[2] is increasingly influenced by a new class of financial commentators known as Key Opinion Leaders (KOLs) or ‘finfluencers’.
Broadcasting to large followings on social media platforms such as YouTube, Instagram and Telegram, these individuals analyse market trends and share investment strategies, often including recommendations of individual stocks and bonds. According to the IFEC study, nearly half (49%) of stock investors now use social media platforms as a source for investment information. More significantly, one in three (33%) admit to making investment decisions based directly on tips and information gathered from these online sources. While this has democratised access to financial information, it has also created a complex regulatory environment. The Securities and Futures Commission (“SFC”), with a sharpened focus on investor protection in the digital era, is now increasing its scrutiny of such activities.
Recent enforcement actions, which now include a licence suspension and the first-ever custodial sentence for providing paid investment advice on a social media group without a licence, signal that the SFC is actively policing this area, even ahead of its anticipated formal guidance on the topic. This creates a more hazardous regulatory environment for both the influencers themselves and any licensed corporations that engage with them.
The regulatory framework
The SFC’s enforcement powers are grounded in the Securities and Futures Ordinance (Cap. 571) (the “SFO“). Schedule 5 of the SFO defines “advising on securities” as a Type 4 regulated activity, which requires a licence from the SFC when conducted as a business. Under sections 114(1)(a) and 114(8) of the SFO, it is a criminal offence to carry on a business in a regulated activity without such a licence, with penalties up to a fine of $5,000,000 and imprisonment for 7 years.
While Part 2 of Schedule 5 of the SFO provides an exemption for advice given in publications “generally available to the public,” such as newspapers or public broadcasts, this was not designed to cover modern interactive platforms; the relevant provisions of the SFO were drafted back in 1999 to 2000. The SFC’s position is that this exemption may not apply to some scenarios where investment-related content is provided on social media and other online platforms,[3] for example, where investment-related content is provided to a select group of paying subscribers through private chat groups.
Recent enforcement actions
The SFC has recently demonstrated its willingness to use its full range of powers, pursuing both disciplinary sanctions against licensees and criminal prosecution against unlicensed individuals.
- Criminal conviction followed by disciplinary sanction: the case of Mr Wong Ming Chung
In March 2025, the SFC took disciplinary action against Mr Wong Ming Chung, a finfluencer also known as Franky Wong. Although Mr Wong was an SFC-licensed representative of Tse’s Securities Limited[4] at the time, he had been operating a paid Telegram group in his personal capacity, providing specific investment advice to subscribers without the knowledge or approval of his accredited firm.
For this conduct, Mr Wong was first criminally convicted by the Eastern Magistrates’ Court for carrying on an unlicensed business of advising on securities. Following that conviction, the SFC determined that Mr Wong was not a fit and proper person to remain licensed and, in separate disciplinary proceedings, suspended his licence for 16 months. This case illustrates that a licensed individual acting outside the scope of their employment can face both criminal and regulatory consequences.
The SFC’s announcement can be viewed here.
- FIrst-ever imprisonment of an unlicensed individual: The case of Mr Chau Pak Yin
In a landmark development, the criminal prosecution against Mr Chau Pak Yin, an unlicensed individual known on social media as “Futu大股東” or “富途大股東”, has recently concluded with a conviction and the first-ever custodial sentence for the offence involved. On 7 November 2025, Mr Chau was convicted by the Eastern Magistrates’ Court for carrying on a business in Type 4 regulated activity without a licence. The Court heard that Mr Chau hosted a paid Telegram group where he provided commentaries and recommendations on securities, charging subscribers a monthly fee of approximately HK$1,560 and earning over HK$43,000.
In a significant escalation, the Eastern Magistrates’ Court sentenced Mr Chau to six weeks’ immediate imprisonment and was remanded in custody after his bail application pending appeal was rejected. This case demonstrates not only the SFC’s readiness to prosecute but also the Court’s view on the seriousness of the offence, setting a stark precedent for unlicensed finfluencers.
The SFC’s announcement can be viewed here.
Implications for licensed corporations
The SFC’s focus extends beyond individual finfluencers to the licensed corporations that engage them. In a June 2025 news publication, the SFC confirmed it had commenced a thematic inspection in April 2025 to assess how securities brokers comply with regulatory requirements when using finfluencers and digital platforms for marketing. The scope of this inspection specifically includes reviewing the firms’ due diligence processes on these individuals and their ongoing monitoring to prevent any involvement in unlicensed activities or improper practices.[5]
Consequently, any engagement with a finfluencer could be scrutinised by the SFC for breaches of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, including:
- Paragraph 2.3 (Advertising): Failing to ensure that the finfluencer’s statements and advertisements on behalf of the licensed corporation are not false, disparaging, misleading or deceptive.
- Paragraph 4.1 (Fit and proper staff): Failing to ensure that any person it appoints to conduct business, including finfluencers, is fit and proper and otherwise qualified to act.
- Paragraph 4.2 (Staff supervision): Lacking effective resources for the proper ongoing supervision of finfluencers.
- Paragraph 4.3 (Internal control): Lacking effective internal control procedures and financial and operational capabilities to protect its clients from financial loss arising from dishonest acts, professional misconduct or omissions.
- Paragraph 12.4 (Responsibility for acts of employees and agents): Being held responsible for the acts or omissions of a finfluencer deemed to be its agent in respect to the conduct of its business.
As part of these supervisory efforts, the SFC has also emphasised its plan to issue guidance to licensed corporations outlining the expected standards when engaging finfluencers and digital platforms for marketing purposes.
Key takeaway
The regulatory landscape for online financial commentary in Hong Kong is clearly shifting. The SFC’s recent actions show that reliance on the exemption provided in the SFO is a high-risk strategy. Both individuals operating as finfluencers and licensed corporations considering collaborations must now proactively assess their activities to ensure full compliance with the SFO and the SFC’s codes. In particular, finfluencers or licensed corporations should ask themselves questions such as:-
- Can finfluencers avoid liability even if they remain anonymous on social media platforms?
- Can finfluencers avoid detection by SFC by providing their advice through private instant messaging groups requiring payment for access?
- Does it matter if the finfluencers are located outside Hong Kong?
- What amount to giving advice to the public? Could disclaimers exempt the finfluencers or the licensed corporations from potential liability?
- What fundamental steps and precautions must licensed corporations take when engaging finfluencers?
There are no straight-forward answers to the above questions and each case will be assessed and determined by the SFC on a case-by-case basis. That said, it is now vital for finfluencers and licensed corporations to revisit their operation models, ensuring that behind the huge potential and benefits of the digital platforms, they will not shoot themselves in the foot.
At Stevenson, Wong & Co., our regulatory and compliance team has extensive experience advising clients on their obligations under the SFO and the codes and guidelines from the SFC. To learn more about our services, please contact our Ms. Rainbow Ip at 2533 2655, Mr. Kenneth Leung at 2533 2670, Mr. Alex Tsang at 2533 2541 or Mr. Ronnie Tse
[1] https://www.sfc.hk/-/media/EN/files/COM/Reports-and-surveys/Report-on-review-of-LCs_Eng_20220831.pdf
[2] https://www.ifec.org.hk/web/common/pdf/about-ifec/retail-investor-study-2023.pdf
[3] SFC suspends finfluencer for 16 months, https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/enforcement-news/doc?refNo=25PR35
[4] Tse’s Securities Limited is licensed under the Securities and Futures Ordinance (SFO) to carry on business in Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. Wong was licensed under the Securities and Futures Ordinance (SFO) to carry on business in Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities.
[5] https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR82