HKSI Paper 11 study guide
HKSI Paper 11 · Work through your exam, one topic at a time.
HKSI Paper 11 - Corporate Finance is one of the licensing examination papers set by the Hong Kong Securities and Investment Institute (HKSI) for individuals carrying out regulated activities tied to corporate finance advisory work in Hong Kong. It is most relevant to practitioners who advise listed issuers and their controlling shareholders: sponsor and ECM staff at investment banks, corporate finance lawyers and in-house counsel, compliance officers covering advisory desks, and accountants moving into transaction advisory. The HKSI Paper 11 study guide has 8 sections and about 3,983 words.
01Regulatory framework and corporate finance advisory standards
This domain tests who does what in Hong Kong corporate finance - the division of labour between the SFC, the Exchange and the Companies Registry - and the standards expected of the licensed advisers who sign off on transactions. SFC : statutory regulator under the Securities and Futures Ordinance (Cap.
533 words, about 3 min02Hong Kong listing regime and Listing Rules requirements
This domain tests eligibility for listing on the Main Board and GEM, the structure of a listing application, and the Listing Rules that govern the route from Form A1 to the first day of dealings. Profit test : aggregate profit of at least HK 80 million over the three most recent financial years, including at least HK 35 million in the most recent year and HK$45 million aggregate over the two preceding years.
541 words, about 3 min03Equity fundraising: IPOs, placings, rights issues and open offers
This domain tests the mechanics and approval routes for raising equity after listing: which structures need shareholder approval, which can be done under a general mandate, and what price and disclosure constraints apply. A general mandate, refreshed at each AGM, permits issues of up to 20% of the issued share capital, plus the number of shares repurchased under the 10% repurchase mandate.
516 words, about 3 min04Notifiable transactions, connected transactions and major transactions
This domain tests the classification machinery in Chapters 14 and 14A: how a transaction is sized, when shareholder approval is needed, and what additional requirements apply when the counterparty is connected to the issuer. Five ratios are calculated: assets (target's total assets ÷ issuer's total assets), profits (target's profits ÷ issuer's profits), revenue, consideration (consideration ÷ issuer's market capitalisation) and equity capital (shares issued as consideration ÷ issued shares).
440 words, about 2 min05Takeovers, mergers and share buy-backs under the Takeovers Code
This domain tests the mandatory offer triggers, the terms every offer must contain, the constraints on the offeror and the target board, and how buy-backs interact with the Code. 30% rule : a person acquiring 30% or more of a company's voting rights must make a mandatory general offer for all remaining shares.
525 words, about 3 min06Valuation methodologies and financial analysis
This domain tests whether you can select and apply a valuation method, bridge from enterprise value to equity value, and recognise the regulatory constraints on forecasts and fairness opinions. Discounted cash flow : project free cash flow to the firm, discount at WACC (CAPM cost of equity plus after-tax cost of debt, weighted at market values), add a terminal value (Gordon growth or exit multiple), then subtract net debt to reach equity value.
463 words, about 2 min07Debt and structured finance, including bonds and convertible instruments
This domain tests the debt products a corporate finance adviser meets in practice, the listing routes for debt, and the analytics of convertible and exchangeable instruments. Plain vanilla bonds, medium term note programmes, high-yield notes, perpetual securities, convertible bonds, exchangeable bonds and bonds with warrants.
476 words, about 2 min08Corporate restructuring, schemes of arrangement and delisting
This domain tests how companies are reorganised, privatised or removed from the market: schemes of arrangement, capital reorganisations, reverse takeovers and the delisting machinery. Governed by Part 13 Division 2 of the Companies Ordinance (Cap.
489 words, about 2 min