LE Paper 1 · Topic 1
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.
9 min read6 sections
Checked October 2026 against sfc.hk (Our structure, Regulatory objectives, Who we regulate, Dual filing, Takeovers Panel and related committees, Investor compensation FAQs, Type 13 circular 23EC32), hkex.com.hk transaction fees page, hkma.gov.hk, mpfa.org.hk, afrc.org.hk, ifec.org.hk, fstb.gov.hk and Government press releases on the PRP (24 Oct 2024), MMT/SFAT chairmen (30 Aug 2024), SFC Chairman (14 Oct 2024) and the 2012 SFO amendments. Independent prep, not endorsed by HKSI Institute or the SFC.
Hong Kong regulates by sector, with policy set by the Financial Services and the Treasury Bureau (FSTB) and day-to-day regulation left to four regulators. The question is almost always: what is the firm, and what is the product?
| Sector | Regulator | Main law |
|---|---|---|
| Banks, restricted licence banks, deposit-taking companies | HKMA (Monetary Authority) | Banking Ordinance (Cap. 155) |
| Securities, futures, funds, licensed corporations | SFC | SFO (Cap. 571) |
| Insurers and insurance intermediaries (licensed by IA since 23 Sep 2019) | Insurance Authority | Insurance Ordinance (Cap. 41) |
| MPF and occupational retirement schemes, MPF intermediaries | MPFA | MPFSO (Cap. 485) |
| Auditors of public interest entities, CPA practising certificates (since 1 Oct 2022) | AFRC | AFRC Ordinance (Cap. 588) |
| Centralised virtual asset trading platforms (since 1 Jun 2023) | SFC |
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| AMLO (Cap. 615) Part 5B |
| Fiat-referenced stablecoin issuers (since 1 Aug 2025) | HKMA | Stablecoins Ordinance |
Products and sellers can have different regulators. The SFC authorises an investment-linked assurance scheme, but the IA licenses the agent who sells it. For MPF intermediaries, the HKMA, IA or SFC investigates as front-line regulator according to the intermediary's core business, but only the MPFA can impose disciplinary orders under the MPFSO.
Trap: naming the regulator of the product when the question asks about the person selling it, or the reverse.
Takeaway: Ask two questions: who is the firm, and what is the product? Firm type picks the conduct regulator.
The FSTB's Financial Services Branch handles policy and legislation; it does not license or supervise firms. The Monetary Authority is appointed by the Financial Secretary under s.5A of the Exchange Fund Ordinance, and the HKMA's functions are currency stability within the Linked Exchange Rate System, financial and banking stability, supporting Hong Kong as an international financial centre, and managing the Exchange Fund.
The SFC is an independent statutory body, but it is answerable to Government in defined ways:
Trap: treating 'independent' as 'unaccountable'. The SFC is free from day-to-day direction but its budget, appointments and procedures all run back to Government.
Takeaway: FSTB makes policy; regulators implement. The Financial Secretary appoints the Monetary Authority; the Chief Executive appoints the SFC Chairman.
