HKSI Paper 1 study guide
HKSI Paper 1 · Work through your exam, one topic at a time.
HKSI Licensing Examination Paper 1, formally Fundamentals of Securities and Futures Regulation, is the regulation paper set by the Hong Kong Securities and Investment Institute for individuals seeking registration with the Securities and Futures Commission to perform regulated activities. It is typically taken by new licence applicants, responsible officers, compliance and operations staff, and practitioners moving between roles, often alongside Paper 2 or Paper 6 depending on the activity. The HKSI Paper 1 study guide has 9 sections and about 3,744 words.
01Regulatory framework and structure of the Hong Kong securities and futures markets
Domain 1 examines the architecture of the Hong Kong market: which statute creates each regulator, which body supervises which conduct, and how statutory regulation, exchange self-regulation and government oversight interlock. Questions typically ask who supervises a bank selling funds, or whether a Code of Conduct has legal force.
437 words, about 2 min02Securities and Futures Commission and other regulators: roles, powers and enforcement
Domain 2 tests the SFC's actual toolkit - how far its investigative powers reach, what sanctions it can impose, what only a court can order, and how its decisions are reviewed. The SFC is a body corporate established by the SFO.
427 words, about 2 min03Licensing and registration of intermediaries and individual representatives
Domain 3 tests the gateway into the industry: who needs which licence, what the SFC checks before granting it, and what must be maintained afterwards. A company conducting a regulated activity needs a licence from the SFC as a licensed corporation, unless it is an authorized financial institution registered with the SFC as a registered institution (the HKMA being its front-line supervisor).
435 words, about 2 min04Business conduct and conduct of business requirements for intermediaries
Domain 4 tests the Code of Conduct for Persons Licensed by or Registered with the SFC - the standards applied to selling, advising, executing and reporting, and the yardstick in most disciplinary cases. The Code opens with twelve General Principles: honesty and fairness; diligence; capabilities; information about clients; information for clients; conflicts of interest; compliance; client assets; client accounts; orders; transactions; and marketing.
397 words, about 2 min05Client onboarding, know-your-client, suitability and client asset protection
Domain 5 tests the front end of the relationship: what a firm must know about a client before advising or dealing, how suitability is evidenced, and how client money and securities are protected. The firm must establish identity, financial situation, investment experience, objectives and risk tolerance, and record the basis of any risk profile.
423 words, about 2 min06Offences, market misconduct and disciplinary regime
Domain 6 tests the two-track liability system: civil market misconduct before the Market Misconduct Tribunal and criminal offences before the courts, plus SFC discipline of intermediaries. Part XIII of the SFO defines six types of market misconduct: insider dealing; false trading; price rigging; disclosure of information about prohibited transactions; disclosure of false or misleading information inducing transactions; and stock market manipulation.
396 words, about 2 min07Listing regime, corporate disclosure and inside information
Domain 7 tests how companies list, what must be disclosed, and who enforces it - SEHK, the SFC, or the courts. SEHK administers the Main Board and GEM Listing Rules as front-line regulator, but the SFC has statutory backing: it approves listing rules, may object to a listing application, and, under the dual filing regime, treats listing documents as filed with it.
402 words, about 2 min08Investment products, collective investment schemes and offering rules
Domain 8 tests the offer perimeter: when an investment may be marketed to the public, what SFC authorisation means, and how collective investment schemes are regulated. No person may issue an advertisement, invitation or document containing an invitation to acquire an interest in a security or a collective investment scheme, or to participate in a structured product, unless the offer is authorised by the SFC or falls within an exemption.
423 words, about 2 min09Anti-money laundering and counter-terrorist financing obligations
Domain 9 tests the AML/CTF obligations of licensed corporations and registered institutions - risk-based controls, customer due diligence, sanctions and reporting. The core statute is the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.
404 words, about 2 min