HKSI LE Paper 3 study plan
HKSI LE Paper 3 · Give each week a clear focus.
8 weeks · About 7 hours per week
Regulatory framework and the SFC
Map the SFC's statutory functions, powers and the ordinances it administers (SFO, SFC Ordinance) into a one-page structure diagram
Distinguish the roles of the SFC, the HKMA, the Stock Exchange of Hong Kong and the Investor Compensation Fund in supervision and enforcement
Explain how the SFC's rule-making, codes and guidelines interact with statutory provisions, and identify which instruments are legally binding versus guidance
Summarise the SFC's investigation, intervention and disciplinary powers and the appeal route to the Securities and Futures Appeals Tribunal
Your checkpoint
A one-page regulatory architecture map plus a 20-question self-test on Domain 1 scored at 80% or above
Licensing and registration of intermediaries and individuals
Classify the regulated activities under the SFO and match each to the licence type that covers it
Apply the fit and proper criteria and the competence requirements to determine whether a hypothetical individual qualifies for registration
Outline the licensing process, application documentation and the role of responsible officers and managers-in-charge
Distinguish corporate licensing from individual registration, and describe continuing obligations such as notification of changes and annual returns
Your checkpoint
A completed licensing decision worksheet for six fictional applicants (three corporate, three individual) with a written rationale for each outcome
Conduct of business and client dealings
Apply the suitability obligation and know-your-client requirements to fact patterns involving retail and professional investors
Explain the client agreement, risk disclosure and order-handling requirements, including best execution and priority of client orders
Identify conflicts of interest and describe how to manage them through disclosure, segregation and Chinese walls
Distinguish discretionary accounts from advisory and execution-only relationships and the documentation each requires
Your checkpoint
Three worked case scenarios on suitability and client dealing, each with a decision, the governing rule and the consequence of getting it wrong
Offences, market misconduct and disciplinary action
Distinguish the market misconduct offences under the SFO, including insider dealing, false trading, price rigging and disclosure of false or misleading information
Describe the MMT and the criminal route, and explain when each applies and the sanctions available
Outline the disciplinary regime for licensed persons, including suspension, revocation, fines and public censure
Explain the SFC's co-operation with the police and other regulators in enforcement matters
Your checkpoint
A comparison table of civil versus criminal market misconduct proceedings, plus a timed 30-question mock on Domains 1-4 scored at 75% or above
Securities and futures markets and their participants
Describe the structure and trading mechanisms of the securities and derivatives markets, including the roles of the Exchange, clearing houses and the CCASS
Explain the roles of exchange participants, intermediaries and other market participants in order flow and settlement
Outline the main market infrastructure safeguards, including position limits, margin requirements and short selling rules
Identify the key HKEX rulebook obligations that affect licensed intermediaries in their day-to-day operations
Your checkpoint
A market-participant flow diagram annotated with the rule or body that governs each step, plus ten short-answer questions
Offers of securities and corporate regulation
Apply the prospectus regime, including the authorisation process, exemptions and the consequences of issuing without authorisation
Distinguish public offers from private placements and explain the restrictions on offers of securities to the public
Outline the Listing Rules' role in corporate regulation and the SFC's power to object to listing applications
Describe the takeover and share buy-back regime and the disclosure of interests obligations under the SFO
Your checkpoint
A one-page decision tree for whether an offer requires SFC authorisation, tested against four fictional offering scenarios
Anti-money laundering and counter-terrorist financing
Apply the risk-based approach to customer due diligence, including simplified and enhanced measures and when each applies
Identify suspicious transaction indicators and describe the reporting obligation to the Joint Financial Intelligence Unit
Explain record-keeping requirements and the consequences of tipping off
Distinguish the AML/CFT guidelines issued by the SFC and the HKMA and the role of the anti-money laundering ordinance
Your checkpoint
A completed suspicious transaction report narrative for a fictional client file, plus a 15-question AML/CFT quiz scored at 80% or above
Regulatory framework and the SFC & Offences, market misconduct and disciplinary action
Revisit the weakest two domains from earlier mocks and close the gaps with targeted revision
Complete two full-length timed mock papers under exam conditions and review every wrong answer
Consolidate a personal one-page summary of key numbers, time limits and thresholds across all seven domains
Rehearse the exam interface and time allocation strategy for the multiple-choice format
Your checkpoint
Two full mock papers completed with a final score of 80% or above on each, plus a written list of residual weak areas and a revision plan
Milestones
Week 2: Can explain the regulated activity classification and the fit and proper criteria without notes, and score 80% or above on a mixed Domains 1-2 quiz
Week 4: Score 75% or above on a timed 30-question mock covering Domains 1-4, with no more than two errors in the market misconduct section
Week 6: Correctly classify all four offering scenarios in the prospectus decision tree and explain the reasoning aloud in under five minutes
Week 8: Achieve 80% or above on two full-length mock papers and identify no more than three residual weak topics