HKSI LE Paper 7 study plan

Map the SFC's regulatory architecture: identify the roles of the SFC, HKMA, HKEX and the Investor Compensation Fund, and state which body licenses which activity

Distinguish Type 1, 2, 4, 5, 7, 9 regulated activities and match each to concrete business examples such as dealing in securities, advising on securities, and asset management

Explain the core conduct requirements under the SFO and subsidiary legislation: suitability, know-your-client, client asset segregation, and record-keeping obligations

Define the mechanics of futures and options contracts: contract specification, margin, mark-to-market, settlement, and the difference between exchange-traded and OTC derivatives

Calculate payoff and profit/loss profiles for long and short futures, calls and puts at expiry, and sketch the payoff diagram for each position

Explain option pricing inputs (underlying price, strike, volatility, time to expiry, interest rate, dividends) and how each moves premium

Describe swap structures (interest rate swaps, cross-currency swaps) and the cash-flow logic of each leg

Outline the risk and disclosure concerns for structured products and the regulatory expectations around selling them to retail clients

Summarise Hong Kong equity market structure: Main Board versus GEM, trading and settlement mechanics, short selling rules, and stamp duty on transfers

Sequence the Hong Kong IPO process from sponsor appointment through listing, including due diligence, prospectus vetting and the role of the Listing Committee

Explain sponsor and underwriter duties, the eligibility tests (profit, market capitalisation/revenue, cash-flow tests) and the sponsor's obligations to the regulator

Distinguish connected transactions, continuing connected transactions and notifiable transactions, and state the shareholder approval and disclosure thresholds

Describe the Takeovers Code triggers, mandatory general offer rules and the role of the Takeovers Executive

Apply the inside information disclosure regime: when disclosure is required, permitted delays, and consequences of breach

Distinguish bond structures: fixed versus floating coupon, zero-coupon, callable, puttable, convertible and perpetual, and identify the risk each structure introduces

Compute bond price, yield to maturity, current yield and duration, and explain the inverse price-yield relationship and reinvestment risk

Explain the Hong Kong debt market landscape: Exchange Fund bills and notes, HIBOR, the RMB bond market, and the role of the HKMA in the money market

Describe foreign exchange market mechanics: spot, forward, swap, quotation conventions and the role of the HKMA's linked exchange rate system

Explain interest rate parity and how forward points reflect the interest rate differential between two currencies

Compare collective investment scheme structures: unit trusts, mutual funds, ETFs, and the SFC-authorised versus unauthorised distinction, including marketing restrictions

Explain the key requirements of the SFC Code on Unit Trusts and Mutual Funds: investment restrictions, pricing and dealing, disclosure, and the role of the trustee and custodian

Describe fund management principles: mandate, benchmark, tracking error, active versus passive management, and fee structures including performance fees

Apply asset allocation concepts: strategic versus tactical allocation, correlation, diversification and rebalancing, and the risk-return implications of asset class mixes

Explain the money market instruments a fund manager uses for liquidity: certificates of deposit, commercial paper, treasury bills and repo

Explain equity-related products beyond ordinary shares: depositary receipts, rights issues, bonus issues, share splits and share buy-backs, and their effect on price and share count

Describe corporate actions processing and the impact on holders, including entitlement dates and adjustments to derivative contracts

Summarise the regulatory framework for fund distribution and advice: suitability obligations, product due diligence, and disclosure of conflicts and fees

Explain the investor protection mechanisms applicable to funds and equities: compensation arrangements, cooling-off where applicable, and complaint channels

Consolidate the cross-cutting compliance themes: anti-money laundering and counter-terrorist financing obligations, client identity verification, and suspicious transaction reporting

Reconcile the professional investor regime across securities, funds and derivatives, and state the criteria and the consequences of misclassification

Review the derivatives and corporate finance overlap: structured product issuance, listing of derivative warrants and callable bull/bear contracts, and the disclosure obligations attached

Identify the most commonly tested numeric thresholds and time limits across all domains and commit them to memory

Complete two full-length timed mock examinations under exam conditions and record the score by domain

Diagnose the two weakest domains from mock results and re-study those areas using targeted notes rather than re-reading everything

Rehearse the numeric calculations (bond price and duration, option payoff, forward points, transaction thresholds) until each is completed without reference

Build a final one-page recall sheet of definitions and regulatory roles for last-day review