HKSI Paper 1 Participating in the Hong Kong exchanges question: SFC authorise the excess under the asset-manager route in Cap

HKSI Paper 1Participating in the Hong Kong exchanges

Kowloon Bay Asset Management Ltd, licensed for Type 9 only, manages HK$65 billion. Its funds need HSI futures positions above the prescribed limit. Can the SFC authorise the excess under the asset-manager route in Cap. 571Y?

A No: only HKFE, not the SFC, may authorise excess positions held for funds
B Yes: but only up to 50% above the limit, as its assets are below HK$100 billion
C No: that route is open only to Type 9 firms managing at least HK$80 billion
D Yes: any Type 9 licensed corporation may be authorised up to 300% above the limit

Show the answer and explanation

Answer: C. No: that route is open only to Type 9 firms managing at least HK$80 billion

Section 4E of Cap. 571Y lets the SFC authorise a corporation licensed or registered for Type 9 to hold a specified contract above the prescribed limit by up to the specified percentage (300%, defined in s.2). Section 4E(3)(b) confines this to managers whose assets under management total not less than HK$80 billion, so at HK$65 billion the firm does not qualify. The route is not open to every Type 9 firm, and there is no 50% tier tied to HK$100 billion. The SFC, not HKFE, grants s.4E authorisations; exchange authorisations under s.4A are for registered market makers, liquidity providers and their clearing participants. Source: Cap. 571Y ss.2, 4(3), 4A and 4E (as at October 2026). Source: Securities and Futures (Contracts Limits and Reportable Positions) Rules (Cap. 571Y) ss.2, 4(3), 4A and 4E (as at October 2026).

Common mistake

Candidates remember the 300% uplift but forget the HK$80 billion assets-under-management threshold.

Practise more Paper 1 Participating in the Hong Kong exchanges questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: Participating in the Hong Kong exchanges HKSI Paper 1 practice questions & mock exams

Related HKSI Paper 1 questions

In October 2026, Mr Ip enters a limit order during continuous trading to buy an SEHK-listed ordinary share at HK$18.35. The share last traded at HK$18.30. How is the price of his order treated?Shares of Sai Kung Holdings, a CAS security, show nominal prices of HK$50.20 at 3:59:00 p.m., HK$50.10 at 3:59:15, HK$50.40 at 3:59:30, HK$50.30 at 3:59:45 and HK$50.10 at 4:00:00. What is its CAS reference price?For its own account, Pearl River Capital Ltd holds 21,500 long Hang Seng China Enterprises Index (HSCEI) futures and 20,000 long Mini-HSCEI futures across several contract months. It has no authorisation to exceed limits. What is its position under Cap. 571Y?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public HKSI Paper 1 syllabus. Unofficial, not endorsed by HKSI Institute or the SFC. Verify figures and rules against current guidance before relying on them.