Type 1 Securities Sales Representative Examination study guide
Type 1 Securities Sales Representative Examination · Work through your exam, one topic at a time.
The Type 1 Securities Sales Representative Examination is the qualifying credential for individuals who deal in securities - advising clients on, selling, and executing transactions in equities, bonds, funds and structured products. It is typically taken by new joiners at brokerages, banks and asset managers, and by staff moving from support or operations roles into a client-facing dealing function. The Type 1 Securities Sales Representative Examination study guide has 10 sections and about 3,375 words.
01Regulatory framework and licensing regime for securities dealing
Questions here check whether you can map a real business activity onto the ten regulated activities in the Securities and Futures Ordinance (Cap. 571) (SFO), then say who must be licensed, what a responsible officer (RO) must satisfy, and how banks differ from securities firms.
362 words, about 2 min02Corporate finance and equity capital markets
This domain tests the IPO and placing workflow in Hong Kong: who does what, which rulebook applies, how allocations and clawback work, and when the Takeovers Code is triggered. Listing is governed by the HKEX Listing Rules (Main Board and GEM).
337 words, about 2 min03Debt securities and fixed income products
Expect questions on how bonds are priced and quoted, what the investor actually pays, how credit and interest-rate risk are measured, and how structural features change the payoff. Price and yield move inversely.
309 words, about 2 min04Derivatives, structured products and warrants
This domain checks product mechanics and risk identification: futures and options, listed derivative warrants, callable bull/bear contracts (CBBCs) and retail structured products, plus the selling obligations attached to them. Exchange-traded futures and options are margined and marked to market daily through the clearing house, which manages counterparty risk.
327 words, about 2 min05Funds, collective investment schemes and ETFs
Questions test the authorisation boundary between retail and private funds, the key restrictions in the Unit Trusts and Mutual Funds Code, and how ETFs and REITs actually work. A collective investment scheme offered to the Hong Kong public must be authorised by the SFC under SFO Part IV.
352 words, about 2 min06Trading, order handling and market conduct
This domain tests the operational and conduct rules that sit around order flow: order types, execution quality, allocation fairness, short selling and the market's mechanical safeguards. Client orders must be handled fairly and promptly, with client orders taking priority over proprietary orders and no front-running of known client flow.
371 words, about 2 min07Client onboarding, suitability and know-your-client
This domain tests whether you can build a defensible client file and match a product to a client, including the professional investor regime and discretionary accounts. Before dealing, obtain a signed client agreement and complete KYC: identity, financial situation, investment experience, investment objectives, risk tolerance and investment horizon.
329 words, about 2 min08Anti-money laundering and counter-terrorist financing
Expect scenario questions on customer due diligence (CDD), enhanced due diligence (EDD), politically exposed persons (PEPs), sanctions screening, suspicious transaction reporting and record keeping. Hong Kong uses a risk-based approach under the SFC's AML/CFT Guideline for licensed corporations, alongside the Drug Trafficking (Recovery of Proceeds) Ordinance, the Organized and Serious Crimes Ordinance and the United Nations (Anti-Terrorism Measures) Ordinance.
336 words, about 2 min09Business conduct, ethics and conflicts of interest
This domain tests the general principles in the SFC Code of Conduct and how a firm manages the conflicts that inevitably arise between client, firm and employee interests. The Code rests on nine general principles: honesty and fairness; diligence; capabilities; information about clients; information for clients; conflicts of interest; compliance; client assets; and client accounts.
324 words, about 2 min10Market misconduct, insider dealing and enforcement
This domain tests the SFO Part XIII market misconduct regime, the elements of insider dealing, the difference between civil and criminal routes, and the SFC's enforcement toolkit. Part XIII identifies six types of market misconduct: insider dealing; false trading; price rigging; disclosure of false or misleading information inducing transactions; stock market manipulation; and disclosure of inside information (the listed corporation's own duty under Part XIVA).
328 words, about 2 min