Hong Kong Special Administrative Region of the People’s Republic of China is one of the biggest financial centers of the region of Asia. Over the last few decades, Honk Kong has become one of the biggest financial centers around the world thanks to its low taxation and free trade opportunities.
Having a currency as the eight most traded around the world, the people of Hong Kong are very actively engaging in the Forex trading market. Hong Kong dollar is very actively traded and represents a very important part of Forex trading, this city also represents a city with the highest number of billionaires in Asia and it also has the largest concentration of ultra-high-net-worth individuals of any city in the world.
Considering its favorable conditions for Forex trading, it should not be a surprise that Forex trading in Hong Kong is so popular. If you are a prospective trader looking for ways to get started in this market, you have come to the right place. In today’s guide, we are going to discuss everything about FX trading in Hong Kong, so follow us and learn everything that there is to know about this market!
The best Forex brokers in Hong Kong
Finding the best Forex broker is not an easy thing. If you are a beginner, there will be a lot of things that you will have to learn to consider before you choose a broker to trade with. While looking for a place for investment, you should do your best to find a Forex broker that is regulated and authorized by the official body to make sure you are staying safe.
If you are a beginner and are having a hard time finding a trustworthy Forex broker, we have great news for you! We have done very intensive research, as a result of which, we were able to find the best FX brokers in Hong Kong. Take a look at our chart below and start trading with some of the best companies in the country!
CySEC, IFSC, ASIC
CySEC, FCA, FSA
100 currency units
CIMA, FCA, NFA
Stay safe while Forex trading in Hong Kong
While trading Forex, one thing that you should be thinking a lot about is your safety and security. The financial market of Hong Kong is very widely respected around the world, it is a place that is considered to be one of the best for doing business. Because Forex trading is so popular here, there is a need for an effective and strong regulatory environment. Just by looking at the financial regulatory framework of Hong Kong, you will be able to easily tell that it actually is quite different from other parts of the world.
The financial market here is mainly regulated by the Monetary Authority of Hong Kong, however, a very interesting thing is that the trading market itself is regulated by dedicated agencies that are working very hard to safeguard the rights of both, brokers and traders.
The official regulatory body for trading in Hong Kong is the Securities and Futures Commissions, simply known as the HKSFC. The agency was created many years ago, back in 1987, and since then, it has played a huge role in regulating and overseeing the local financial market. The approach that the regulatory body decided to take on is very simple. HKSFC is coming up with numerous rules and guidelines, thanks to which, it is able to supervise the companies that are active in the market.
Getting a license
Regulated Forex brokers in Hong Kong are required by the agency to get the official operating license from the regulatory body. Unlike many other countries in Asia, where, the regulatory body does exist but brokers are not required to get licenses, in Hong Kong, no Forex broker can offer their services if they do not own a local license.
If a broker does not have an official license, they will be subject to huge fines and punishment. The regulatory body takes its job very seriously and is very active in taking the necessary steps to keep the market safe and secure for every participant.
The Forex regulatory body sets out certain types of requirements and guidelines that the Forex brokers are required to follow. The standards of conduct in the country are very high, and the brokers will have to dedicate a lot of time to obtain a license in Hong Kong.
Because of such guidelines, Forex brokers in Hong Kong are thought to be much safer than other places in the world. This is a very great thing for traders because they can be sure that if a broker owns a license, it went through a very strict procedure, and is safe to invest with.
However, once the broker got its license, the regulatory process is not done at all. The regulatory agency of Hong Kong is known to go back to the brokers that it has licensed and check how they are doing. In case there is something wrong with these brokers, the regulatory body is ready to impose sanctions, and if the sanctions are not enough, they will go as far as blocking Forex brokers from offering services altogether.
Basic requirements of license in Hong Kong
If a Forex broker decides to start offering its services to the citizens of Hong Kong, there are several steps that it needs to take. One thing that is very similar to other Forex regulatory bodies is that HKSFC requires Forex brokers in Hong Kong to always keep a certain amount of minimum capital.
In the case of the HKSFC, the minimum required capital for Forex brokers in Hong Kong is $HK5 million, which is a lot.
The Forex brokers licensed by the regulatory body are also required to provide regular monitoring and review to the regulatory agency. These reviews include the ongoing events in the company for the past several months or years and should be provided to the regulatory body in great detail.
Another very important part of Hong Kong’s regulatory framework is the Investor Compensation Fund. ICF is something that many other regulatory bodies have used to make the market as safe and secure as possible for traders. The main goal behind the fund is to help those who have lost their funds for reasons that they did not have control over, such as the broker going bankrupt and others like it.
The economy of Hong Kong
One of the main reasons why the economy of Hong Kong is such an important player in Forex trading is the economy that it has. Hong Kong is regarded to be one of the biggest financial markets around the world, and certainly in Asia. It plays a huge role in the economical life of the whole world, and it should not come as a surprise that it plays such a huge role in Forex trading.
Because of the tax-free environment and many other reasons, Hong Kong stands to be one of the most attractive places for Forex trading. Brokers from all around the world are working very hard to make it in this market, and this happens for a reason. The economy of Hong Kong is known to be a capitalist mixed service economy.
The biggest thing that draws so many companies to Hong Kong is the low level of taxation, the minimal intervention of government, and the financial market like no other. The Hong Kong Stock Exchange is known to be the seventh-largest in the world and plays a huge role in the economical situation of Hong Kong.
The role of the government of Hong Kong is very passive in the economy, which makes doing business here relatively easy. Tourism also represents one of the largest parts of the economy, and it accounts for 5% of the GDP. Hong Kong is known to be the 14th most popular destination for international tourists.
Because of this and many other reasons, Hong Kong manages to be one of the top destinations for Forex broker. Some of the best Forex brokers around the world are also registered here, offering local traders the ability to trade Forex very easily.
The national currency of Hong Kong
The Hong Kong dollar is the official currency of Hong Kong. The Hong Kong Monetary Authority is the governmental currency board that takes care of the currency, it also acts as a de facto central bank of Hong Kong and the national currency. According to the official data from 2019, the Hong Kong dollar stands to be the ninth most traded currency in the world, and it is also used in Macau (Macau uses both the Hong Kong dollar and Macanese pataca).
HKG is considered to be a very unusual currency globally, it represents one of the few currencies that is very much likely to enter obsolescence at some point in the future. As of today, the Hong Kong dollar represents one of the most important players in the Forex trading market, as it is traded by tens of thousands of people every day around the world, However, keep in mind that it is not permitted to trade freely and is under the administration of the Hong Kong Monetary Authority.
As we have already said, the Hong Kong dollar is known to be one of the most popular currencies in the market. According to official data from 2019, it has amounted to 3.5% of daily trades in the market, which is a huge number. It stands above currencies like the New Zealand dollar, Swedish krona, South Korean won, Singapore dollar, and many others.
Forex trading platforms in Hong Kong
While talking about Forex trading, it is very important to keep in mind the importance of trading platforms. They are something that offers traders access to the financial market and while looking for the one to use, it is of utmost importance to use the one that fits your needs the best.
There are many trading platforms in Hong Kong available. Just like anywhere else, MetaTrader 4 stands to be the most popular. MT4 was developed by a very famous Russian company, MetaQuotes. MetaTrader is very widely used around the world by leading Forex brokers.
MT4 offers traders access to a very large market, and with the help of numerous indicators, trading Forex with MetaTrader 4 is a great experience. It was released by MetaQuotes exactly 15 years ago, in 2005. A newer version of MetaTrader is available in the market as well, which is known as MetaTrader 5.
There are many other platforms available in Hong Kong as well, such as cTrader, WebTrader, and many others. Recently, mobile trading has become very popular around the world, as well as in Hong Kong. Thanks to smartphones, people all around the world are now able to trade Forex whenever they want to.
Mobile trading is a great way to always keep in touch with the market. Thanks to smartphones, today, even those who are constantly on the go can invest in this market without any trouble.
Forex trading in Hong Kong – Key Takeaways
Hong Kong stands to be one of the top destinations for many companies around the world. Because of low taxes and almost non-existent government interference in the local business, Hong Kong stands to be one of the best places for businesses. Over the years, Forex trading has become increasingly popular in Hong Kong.
One of the major reasons why it is a great place for Forex trading is the national currency of, Hong Kong dollar, which is the ninth most traded currency around the world. Because of the regulatory framework of Forex brokers in Hong Kong, the market is very safe and secure for traders.
So, if you are planning to start trading in Hong Kong, do your research and only trust reputable Forex brokers that dedicate their time to make the market safer and more secure for you!