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HONG KONG · LICENSING EXAM PREP

Exam-style practice, worked explanations and timed mock exams for the HKSI Licensing Examination: Paper 1 now, with Papers 7 and 8 being written for the 9 Dec 2026 syllabus.

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© 2026 HKSI Prep. All rights reserved. HKSI Prep is an independent study service. It is not affiliated with, endorsed by or connected to the Hong Kong Securities and Investment Institute (HKSI Institute) or the SFC. 'HKSI' is used only to describe the examination. All questions are original practice material, not past or official examination questions. Rules change: always check the current HKSI syllabus and the SFC's own publications. Not regulatory, legal or investment advice. Copying, scraping or reselling the questions is not allowed (see our Terms).

Study Notes

One note per topic: the must-know facts, the rules in plain English, worked examples and the traps that cost marks. The must-know list, the opening sections and the traps of every note are free; Premium unlocks the rest.

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Regulatory overview of the Hong Kong financial industry

9 min

9 notes, about 2 hours of reading. Start here and work down the list.

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Regulatory overview of the Hong Kong financial industry9 min · Paper 1 opens with the map: which regulator covers which product, how each links to Government, what the SFC exists to do, which panel or tribunal hears which dispute, and where HKEX stops and the SFC starts. Most questions give you a firm, a product or a complaint and ask who is responsible. Learn the splits below and these become quick marks.
Hong Kong law and the Companies Ordinance10 min · Topic 2 tests whether you can place a dispute in the right forum and apply company law to a set of facts. Expect questions on where Hong Kong law comes from under the Basic Law, which court or tribunal hears a claim, basic contract, agency and trust rules, and then the Companies Ordinance (Cap. 622): company types, share capital, charges, meetings and resolutions, directors' duties, minority remedies, inspectors and winding up under Cap. 32. Most marks turn on exact numbers: 75%, 95%, 5%, 21 and 28 days, one month, 12 months.
The Securities and Futures Ordinance (Cap. 571)16 min · The SFO is the main statute behind every other Paper 1 topic, so the exam tests it from two directions: definitions applied to short fact patterns (is this a security, a collective investment scheme, a professional investor?) and the rule, approval route or penalty set by a named Part. This note covers the background, the definitions in Schedules 1 and 5, the SFC (Part II), exchanges, clearing houses and automated trading services (Part III), OTC derivatives (Part IIIA), offers of investments (Part IV) and open-ended fund companies (Part IVA). The second part covers licensing, conduct, enforcement, the Appeals Tribunal, investor compensation, inside information and disclosure of interests (Parts V to XVII).
Licensing, registration and subsidiary legislation16 min · This topic is where the Paper 1 examiners test whether you can apply Part V of the SFO and the rules made under it to a real firm. Expect scenarios: which regulated activity a described business needs, whether an incidental exemption applies, how many responsible officers a firm must have, what a provisional or temporary licence allows, and when a change must be notified. The second half covers the subsidiary legislation that runs a licensed corporation day to day: the Financial Resources Rules, the Client Money and Client Securities Rules, record keeping, contract notes and statements, audit, OTC derivative reporting and clearing, and open-ended fund companies. Most questions turn on a precise number (two officers, 180 days, 7 business days, 10 CPT hours), so learn the figures with the rule they belong to.
Business conduct and client relations11 min · This topic is where Paper 1 turns from law into day-to-day practice. Most questions give you a licensed representative or firm doing something ordinary (opening an account, taking a phone order, selling a bond, treating a client as a professional investor) and ask whether it breaches the SFC's Code of Conduct and what should happen next. The marks come from knowing the exact trigger for each duty: solicitation or not, exchange-traded or not, which type of professional investor, which paragraph. The fund manager, corporate finance adviser, credit rating, OFC and share registrar codes add a few scope questions.
Business operations and practices13 min · Topic 6 tests how a licensed corporation runs itself: the SFC's Internal Control Guidelines, who in senior management answers for what, the AML/CFT regime under the AMLO and the SFC Guideline, suspicious transaction reporting, electronic trading and dark pools, client data under the PDPO, compulsory insurance and the CRS. Most questions give you a firm doing something slightly wrong and ask what the rule requires. The marks come from thresholds and periods: more than 25%, 30 and 120 working days, five years, two years, six years, and the three OSCO penalties.
Participating in the Hong Kong exchanges13 min · This topic tests how a trade actually happens: which HKEX company runs the market, which one clears it, which order type does what, when an order can be cancelled, when a short sale is lawful, and what a futures or options holder must report. Most questions give you a client, an order and a time of day, then ask what the system or the rules do next. Learn the session timetable, the three continuous-trading order types and the reporting thresholds below, and these become quick marks.
Accessing public capital10 min · Topic 8 is where the numbers live: listing tests, public float tiers, appointment deadlines, lock-up periods, transaction bands, the 30% and 2% takeover triggers, and the cooling-off and licensing rules for SFC-authorised and virtual asset products. Most questions give you a company, a shareholder or a product and ask you to apply a threshold. Learn the figures below exactly and know which rule book each one comes from.
Market misconduct and improper trading practices11 min · Expect several Paper 1 questions that hand you a trade or a statement and ask which form of market misconduct it is, whether a defence applies, which forum hears it and what that forum can order. The SFO defines six forms of market misconduct and gives each a civil version before the Market Misconduct Tribunal (Part XIII) and a criminal version in the courts (Part XIV). Learn the two tracks side by side, then the conduct rules on unsolicited calls, front running, churning and fund dealing abuses.