Best Forex Broker Hong Kong 2026

Best Forex Broker Hong Kong 2026: SFC Type 3 vs Offshore

Q: Is forex trading legal in Hong Kong?

Yes, through a firm holding an SFC Type 3 licence for leveraged foreign exchange trading, or through an authorised bank supervised by the HKMA. Very few brokers hold Type 3 — IBKR, Futu and Bright Smart Forex among them.

Q: Which brokers hold an SFC Type 3 licence?

IBKR (CE ADI249), Futu (AZT137) and Bright Smart Forex (AZK567). Tiger HK and uSMART hold Types 1 and 2 but not Type 3. None of IG, Saxo, CMC, Plus500, Pepperstone, Capital.com or eToro currently holds one.

Q: Does the Investor Compensation Fund cover forex losses?

No. The Fund covers defaults “in relation to exchange-traded products in Hong Kong” up to HK$500,000 for securities and HK$500,000 for futures. OTC leveraged FX is not exchange-traded, so it sits outside. The Fund also never covers trading losses — only intermediary defaults such as insolvency, fraud or defalcation.

Q: How do I check a broker on the SFC register?

Search by name or CE number at apps.sfc.hk/publicregWeb. A CE number is two letters and three digits. The record shows each regulated activity with its effective date, responsible officers, licence conditions and public disciplinary actions, and is updated daily. Check it rather than trusting a licence claim on a broker’s own site.

Q: Is Pepperstone regulated in Hong Kong?

No. Pepperstone holds no SFC licence of any type. Hong Kong clients are served by Pepperstone Markets Limited under the Securities Commission of The Bahamas (SIA-F217) — a licensed entity, but outside SFC supervision and outside the Investor Compensation Fund entirely.

Which forex broker is best for Hong Kong traders in 2026? How SFC Type 3 licensing works, and what the Investor Compensation Fund does not cover.

At a glance

Hong Kong regulates retail leveraged FX through a specific licence — SFC Type 3 — and remarkably few firms hold it. None of IG, Saxo, CMC, Plus500, Pepperstone, Capital.com or eToro currently does. The practical result is that most Hong Kong retail FX happens offshore.

Type 3 is the licence that matters. Type 1 is securities dealing; Type 2 is futures. Neither permits leveraged FX.
IBKR (ADI249) and Futu (AZT137) hold Type 3. So does Bright Smart Forex (AZK567). Tiger HK does not.
The ICF pays up to HK$500,000 for securities and HK$500,000 for futures — but only on exchange-traded products.
Saxo’s HK entity shows “No active licence” on the SFC register while its own site still claims Types 1, 2, 3, 4 and 9.
The SFC published once that “more than 60% of their LFET clients made net trading losses”.

What licence does a Hong Kong forex broker need?

The Securities and Futures Ordinance defines ten regulated activity types. For retail leveraged FX only one matters:

One important exclusion. The Type 3 definition excludes leveraged FX conducted “by an authorized financial institution” — so banks sit outside Type 3 and are supervised by the HKMA instead. A bank offering you margin FX is not unlicensed; it is licensed differently.

Table 1 — SFC regulated activity types

Table 1 — SFC regulated activity types
Type	Activity	Covers retail leveraged FX?
Type 1	Dealing in securities	No
Type 2	Dealing in futures contracts	No
Type 3	Leveraged foreign exchange trading	Yes
Type 4 / 5	Advising on securities / futures	No
Type 9	Asset management	No

Who actually holds a Type 3 licence?

Do not repeat Saxo’s own claim. home.saxo/en-hk states the entity is “authorised and regulated by the SFC… Type 1, 2, 3, 4 and 9 (CE No. AVD061)”, while the SFC public register shows no active licence. A second read of the same domain returned only a discontinuation notice. Check the SFC register at apps.sfc.hk before relying on any broker’s licence claim.

Table 2 — SFC licence status

Table 2 — SFC licence status
Broker	HK entity	CE number	Licence types
IBKR	Interactive Brokers Hong Kong Limited	ADI249	1, 2, 3
Futu	Futu Securities International (HK) Limited	AZT137	1, 2, 3, 4, 5, 7, 9
Bright Smart Forex	Bright Smart Forex Limited	AZK567	3
Tiger HK	Tiger Brokers (HK) Global Limited	BMU940	1, 2, 4, 5, 9 — no Type 3
uSMART	uSmart Securities Limited	BJA907	1, 2, 4, 5, 6, 9 — no Type 3
Saxo	Saxo Capital Markets HK Limited	AVD061	No active licence
IG	No HK entity — ig.com/hk redirects	—	None
Pepperstone / Capital.com	Bahamas entities	—	None

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Trading forex and CFDs involves substantial risk of loss. Hong Kong's securities and leveraged foreign exchange markets are supervised by the Securities and Futures Commission (SFC), and the brokers we cover onboard Hong Kong residents through offshore entities that hold no SFC licence — our signals are analyst opinions, not investment advice.

Does the Investor Compensation Fund cover forex?

No — and this is the detail that matters most. The ICF pays up to HK$500,000 per person for securities and HK$500,000 for futures, raised from HK$150,000 for defaults on or after 1 January 2020.

But the scope wording is decisive. The ICC states the Fund compensates investors who suffer losses from the default of a licensed intermediary “in relation to exchange-traded products in Hong Kong”. OTC leveraged foreign exchange is not an exchange-traded product, so it falls outside. Note that neither the SFC nor the ICC publishes an explicit sentence saying “leveraged FX is not covered” — the exclusion operates through that scope definition. And the Fund never covers trading losses in any case, only defaults.

Choosing among the offshore brokers

Most Hong Kong retail FX happens outside the SFC perimeter because so few firms hold Type 3. If that is your route, Pepperstone is the strongest of the offshore options — SCB-regulated, four platforms, published dated spreads. It holds no SFC licence.

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Pepperstone Markets Limited — Securities Commission of The Bahamas, SIA-F217

79.6% of retail investor accounts lose money when trading CFDs with this provider. Pepperstone is not licensed by MAS or the SFC; this is an offshore entity.

Clients outside the UK, EU, Australia, the UAE and Kenya are onboarded offshore: Pepperstone Markets Limited (The Bahamas, SCB licence SIA-F217), where 79.6% of retail investor accounts lose money, and Capital Com Online Investments Ltd (The Bahamas, SCB licence SIA-F245), where 79.75% do. This is a paid affiliate link: we may earn a commission if you open an account. It does not change our ranking or what we publish.

Leverage in Hong Kong

The SFC publishes no retail leverage cap as such. What it does impose, through the Code of Conduct, is a margin floor on Type 3 brokers — initial margin of at least 5% and maintenance margin of at least 3% of gross principal value, implying roughly 20:1.

We were unable to render the Code of Conduct Schedule 6 PDF directly and have taken this from the SFC’s own document index rather than the source text. Confirm with the SFC before relying on it.

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Save up to $2,500/yr (roughly HK$19,500)

Get the signals free

1Open a Base Markets account through our link
2Deposit $400 (roughly HK$3,120) — the capital stays yours to trade
3Send your proof on Telegram and get every signal free

Open a Base Markets account

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Written and reviewed by

Best Trading Signal — the editorial and analysis team

We rate brokers on licensing, cost and withdrawals — and name the drawbacks, not just the strengths. How our signals are produced · Risk Disclosure · Last updated 12 September 2026

Frequently asked questions

Yes, through a firm holding an SFC Type 3 licence for leveraged foreign exchange trading, or through an authorised bank supervised by the HKMA. Very few brokers hold Type 3 — IBKR, Futu and Bright Smart Forex among them.

IBKR (CE ADI249), Futu (AZT137) and Bright Smart Forex (AZK567). Tiger HK and uSMART hold Types 1 and 2 but not Type 3. None of IG, Saxo, CMC, Plus500, Pepperstone, Capital.com or eToro currently holds one.

No. The Fund covers defaults “in relation to exchange-traded products in Hong Kong” up to HK$500,000 for securities and HK$500,000 for futures. OTC leveraged FX is not exchange-traded, so it sits outside. The Fund also never covers trading losses — only intermediary defaults such as insolvency, fraud or defalcation.

Search by name or CE number at apps.sfc.hk/publicregWeb. A CE number is two letters and three digits. The record shows each regulated activity with its effective date, responsible officers, licence conditions and public disciplinary actions, and is updated daily. Check it rather than trusting a licence claim on a broker’s own site.

The SFC does not require disclosure, but it published the figure once from 2018 data: “more than 60% of their LFET clients made net trading losses”, adding that some investors lost over HK$1 million. No individual broker publishes a Hong Kong figure.

No. Pepperstone holds no SFC licence of any type. Hong Kong clients are served by Pepperstone Markets Limited under the Securities Commission of The Bahamas (SIA-F217) — a licensed entity, but outside SFC supervision and outside the Investor Compensation Fund entirely.

Related guides

Trading forex, CFDs and crypto carries a substantial risk of loss and is not suitable for every investor. In Hong Kong, dealing in securities and leveraged foreign exchange trading are licensed activities supervised by the Securities and Futures Commission (SFC) — the brokers reviewed here are onboarded offshore and hold no SFC licence, so no SFC complaint route and no Investor Compensation Fund coverage applies to those accounts. Our signals are analyst opinions, not guaranteed profits, and past performance does not guarantee future results.

Last updated 12 September 2026