Amid escalations in the tech war, Bytedance has applied for five financial licenses in Hong Kong through its local subsidiary.
Why it matters: If approved, the licenses would allow Bytedance to sell securities and futures, trade foreign currency, as well as offer advisory and asset management services in Hong Kong.
- Bytedance will be competing with Alibaba and Tencent, which have already established a presence in Hong Kong’s online brokerage and financial advisory markets through local subsidiaries.
- However, US President Donald Trump’s executive order banning “transactions” between US firms and the company may hinder Bytedance’s ambitions to enter the financial services market.
READ MORE: Techwar: Trump to end transactions with Tencent and Bytedance in 45 days
Details: The Tiktok owner registered its subsidiary, Squirrel Securities, with Hong Kong authorities in December 2019, looking to move into the city’s lucrative financial services market.
- Squirrel has applied for type 1, 4, 5, 6, and 9 licenses, according to Chinese media.
- The company has applied for trademark registration and has obtained a license for stock brokerage, Reuters reported on Monday.
- Squirrel currently has just one full-time employee at the moment, according to the Reuters report citing a person familiar with the situation.
Context: After the resounding success of Tiktok and its domestic version known as Douyin, Bytedance has pursued growth by entering different verticals of the tech industry including edtech, gaming, and workplace collaboration.
- The company has also applied for a virtual banking license in Singapore. The city-state has said it will issue five digital bank licenses by the end of the year, and Alibaba’s Ant Group is one of the other contenders.
- Tiktok left Hong Kong in July after the sweeping National Security Law was implemented.
- After the US government threatened to ban Tiktok in the US, Bytedance is in talks to sell its US business to Microsoft.
- Trump signed an executive order on Friday that bans all transactions between persons and companies under US jurisdiction and the Tiktok owner on Friday. US Secretary of Commerce Wilbur Ross will announce the specifics of the ban on September 15, when the order goes into effect.