Paper 1 Exam Study Guide (2026)
Everything the HKSI LE Paper 1: Fundamentals of Securities and Futures Regulation tests, topic by topic: what each section covers, the facts that come up most, and how to study it. Pair it with the free 15-question practice test.
The exam at a glance
| Questions | 60 multiple-choice questions |
|---|---|
| Time | 90 minutes |
| Passing score | 70% |
| Format | Closed book, computer-based |
| Certifying body | Hong Kong Securities and Investment Institute (HKSI Institute) |
| Test provider | HKSI Institute computer-based test centre in Hong Kong, or Prometric centres outside Hong Kong |
Mind map: the whole exam on one screen
Read the complete Paper 1 study notes for “Hong Kong's Regulatory Framework”
Our first full set of comprehensive notes, about 10 minutes of reading: The SFC and the SFO · The other key bodies · Licensed vs registered, a worked exam example, the traps examiners use and a one-minute recap. Create a free account to read it and see how premium notes work before you decide.
1. Hong Kong's Regulatory Framework
The SFC, the SFO and the other bodies that shape Hong Kong's markets.
Key facts
- The SFC is the independent statutory regulator under the Securities and Futures Ordinance (Cap. 571).
- HKEX operates the exchanges and clearing houses and is the frontline regulator of listed companies.
- The HKMA regulates banks; registered institutions conducting securities business are supervised by the HKMA.
- The SFC's objectives include market fairness, investor protection and reducing systemic risk.
- The Securities and Futures Appeals Tribunal hears appeals against SFC decisions.
Flashcards
Exam tip: Banks doing securities business are registered institutions, not licensed corporations. Watch the wording.
2. Licensing and Registration
Who needs a licence, the 13 regulated activities and the fit and proper test.
Key facts
- Carrying on a regulated activity as a business needs an SFC licence or registration.
- Key types: 1 dealing in securities, 2 futures, 4 advising on securities, 5 advising on futures, 6 corporate finance, 9 asset management.
- Each regulated activity needs at least two responsible officers; at least one RO must be an executive director.
- Individuals must be fit and proper: financial status, competence, reputation, character and reliability.
- Licensed representatives need at least 10 CPT hours a year.
Flashcards
Exam tip: Learn regulated activity numbers both ways: from number to activity and activity to number.
3. Business Conduct and the Code of Conduct
The SFC Code of Conduct's core duties to clients.
Key facts
- Act honestly, fairly and in the best interests of clients.
- Know your client: financial situation, investment experience and objectives.
- Recommendations and solicitations must be reasonably suitable.
- Enter into a written client agreement before providing services.
- Individual professional investors: portfolio of at least HK$8 million.
Flashcards
Exam tip: When two answers seem right, pick the one that puts the client's interests first.
Test yourself on these topics
Take the free 15-question Paper 1 test, then save your results to unlock your Readiness Score and the mistakes bank.
4. Market Misconduct and Offences
The six forms of market misconduct and their penalties.
Key facts
- Six forms: insider dealing, false trading, price rigging, disclosure of information about prohibited transactions, disclosure of false or misleading information, stock market manipulation.
- Cases can go to the Market Misconduct Tribunal (civil) or criminal courts.
Flashcards
Exam tip: The dual-track system means the same conduct can lead to civil or criminal proceedings, but not both for the same act.
5. Disclosure of Interests and Takeovers
Part XV disclosure and the Takeovers Code.
Key facts
- Substantial shareholders disclose at 5% and when crossing each whole percentage.
- Notices are generally due within 3 business days.
Flashcards
Exam tip: Directors disclose any interest at all; only substantial shareholders use the 5% threshold.
6. Client Assets, Financial Resources and Investor Compensation
Protecting client money and securities, and what happens if a broker fails.
Key facts
- Client money goes into a segregated account within one business day.
- Client securities must be safeguarded and can't be repledged without written authority.
Flashcards
Exam tip: The ICF covers broker default, not market losses.
7. Anti-Money Laundering
AMLO duties: CDD, record keeping and reporting.
Key facts
- The AMLO (Cap. 615) and the SFC's AML guideline set CDD and record-keeping duties.
- Identify and verify the customer and beneficial owners.
Flashcards
Exam tip: Staff report to the firm's MLRO, who files with the JFIU.
How to pass
- 60 questions in 90 minutes is 90 seconds each. Definitions and numbers are fast; save time for the scenario questions.
- You need 70%, so 42 out of 60. Numbers are easy marks: 5% disclosure, 3 business days, 30% mandatory offer, HK$500,000 compensation.
- Learn the 13 types of regulated activity by number. Many questions turn on whether an activity is Type 1, 4 or 9.
- Paper 1 is usually taken with Paper 7 and one of Papers 8, 9 or 12.
Frequently asked questions
How long should I study for the Paper 1 exam?
Most working candidates need 4 to 8 weeks at 45 to 60 minutes a day. Book your exam once your Readiness Score has stayed at 80 or higher for about a week.
Can I take the Paper 1 exam online?
Yes. Paper 1 can be taken at the HKSI Institute's computer-based test centre in Hong Kong or, for candidates outside Hong Kong, at a Prometric centre (higher fee). Format: closed book, computer-based. Check the HKSI Institute's current candidate information for the rules.
What score do I need to pass the Paper 1 exam?
70%. The exam has 60 multiple-choice questions and a time limit of 90 minutes.
What are the most tested topics?
The outline covers hong kong's regulatory framework, licensing and registration, business conduct and the code of conduct, market misconduct and offences, disclosure of interests and takeovers, client assets, financial resources and investor compensation, anti-money laundering. Use the free practice test to see which ones you need most.
The premium Paper 1 study path
Premium Paper 1 prep is studied one topic at a time. Each step starts with that topic's key notes and flashcard deck, then its own question sets of 25, so you master one topic before you move to the next. When every topic is strong, the 6 full mock exams show you're ready.
Your step-by-step study path
- 1Hong Kong's Regulatory Framework9 key notes, 115 flashcards, then 450 practice questions in 18 sets of 25Notes free with an account
- 2Licensing and Registration9 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25Premium
- 3Business Conduct and the Code of Conduct9 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25Premium
- 4Market Misconduct and Offences9 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25Premium
- 5Disclosure of Interests and Takeovers8 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25Premium
- 6Client Assets, Financial Resources and Investor Compensation8 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25Premium
- 7Anti-Money Laundering8 key notes, 110 flashcards, then 425 practice questions in 17 sets of 25Premium
- Final step: 6 full mock exams60 questions each, timed like test day. Pass them, then book your exam.Premium
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- 3,000 practice questions + 6 full mock exams per exam
- 800 flashcards + 60 key notes per exam, by topic, plus mind maps
- Spaced repetition + mistakes bank
- Readiness Score & detailed reports
- Video lessons as they release
- Content updates during your access
- 5 bonuses: key numbers sheet, formula sheet, study planner and more
- Pass Guarantee: complete the prep, pass or 100% back
Renews once a year until you cancel. We email you before each renewal. Cancel any time from your account; you keep access until the end of the year you've paid for.
Summarized from the HKSI Institute's official candidate information and the rules cited, checked October 2026. Confirm current requirements with Hong Kong Securities and Investment Institute (HKSI Institute).