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Sponsor and takeovers papers · Last updated October 2026

HKSI LE Paper 16: Sponsors (Representatives): free practice test

The paper for representatives and relevant individuals who carry out sponsor work, that is Type 6 advising on corporate finance, on Hong Kong IPOs. It covers the sponsor regulatory regime, the Listing Rules and the IPO process, preparing engagements and listing applications, due diligence and what happens once the prospectus is issued.

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About the Paper 16 exam

The paper for representatives and relevant individuals who carry out sponsor work, that is Type 6 advising on corporate finance, on Hong Kong IPOs. It covers the sponsor regulatory regime, the Listing Rules and the IPO process, preparing engagements and listing applications, due diligence and what happens once the prospectus is issued.

What's on the exam

Paper 16
General Framework
6 key facts
Listing Rules and the IPO Process
6 key facts
Preparing an IPO Assignment
6 key facts
Preparing a Listing Application
6 key facts
Due Diligence
6 key facts
After Prospectus Issuance
5 key facts

Each branch is a topic in the official outline. Members see every key fact on the full mind map. Read the free study guide →

How to pass the Paper 16 exam

  • 40 questions in 60 minutes gives you 90 seconds each, which is comfortable if you keep moving.
  • The pass mark is 70%, so you need 28 out of 40; you can drop 12 and still pass.
  • Learn the three Main Board financial tests as a set: the options love to swap their market capitalisation and revenue numbers.
  • Due diligence answers turn on professional scepticism: corroborate with evidence rather than accepting management's word.

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Create a free account after the test: your score by topic, a mistakes bank, the complete study notes for the first topic, flashcards and the HKSI Key Numbers Sheet.

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What's in the premium Paper 16 prep

Premium Paper 16 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.

3,000practice questions, every answer explained
6full-length mock exams, 50 questions each, timed
800flashcards with spaced repetition, sorted by topic
60comprehensive key notes across 6 topics

Your step-by-step study path

  1. 1
    General Framework10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
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  2. 2
    Listing Rules and the IPO Process10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
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  3. 3
    Preparing an IPO Assignment10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
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  4. 4
    Preparing a Listing Application10 key notes, 135 flashcards, then 500 practice questions in 20 sets of 25
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  5. 5
    Due Diligence10 key notes, 130 flashcards, then 500 practice questions in 20 sets of 25
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  6. 6
    After Prospectus Issuance10 key notes, 130 flashcards, then 500 practice questions in 20 sets of 25
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  7. Final step: 6 full mock exams50 questions each, timed like test day. Pass them, then book your exam.
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Read the complete Paper 16 study notes for “General Framework”

Our first full set of comprehensive notes, about 10 minutes of reading: Why sponsors are regulated · Who may act as a sponsor · The rulebook for sponsor work · Who does what in a listing · Powers of the SFC and SEHK · Integrity and consequences, 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.

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3,000 practice questions

3,000 exam-style questions per exam, organized topic by topic in sets of 25. Every answer explained, with the rule it comes from.

6 full mock exams

6 full-length timed mock exams per exam, with real question counts and time limits, so test day feels like practice day.

Exam Readiness Score

One 0 to 100 number that tells you when you're ready to book. Reach 80 and you're covered by our Pass Guarantee.

800 flashcards + spaced repetition

800 flashcards per exam, in a deck for each topic, that come back right before you'd forget them. Five minutes a day keeps every number fresh.

60 comprehensive key notes

60 key notes per exam, split across its topics and each explained in full: the concepts, worked exam examples, the traps examiners use and a quick recap. Your first set is free with an account.

Mind maps

See the whole exam on one screen: every topic and the facts under it.

Sample questions with answers

These are the questions in the free test above, with answers. Try the test first. You'll learn more by getting some wrong.

1. In Hong Kong, carrying out sponsor work for an IPO is advising on corporate finance, which is regulated activity:
Answer: Type 6 (advising on corporate finance). Sponsor work is advising on corporate finance, Type 6 regulated activity under Schedule 5 to the Securities and Futures Ordinance (Cap. 571). A sponsor that also underwrites or places the offer shares needs Type 1 (dealing in securities).
2. The core conduct requirements for sponsors of Hong Kong listings are set out in:
Answer: Paragraph 17 of the SFC Code of Conduct. The sponsor regime came into effect on 1 October 2013 through paragraph 17 of the SFC Code of Conduct for Persons Licensed by or Registered with the SFC, which covers due diligence, resources and Transaction Teams.
3. A shareholder holds 29% of a listed issuer's voting rights and buys a further 2%. Under the Takeovers Code, the shareholder:
Answer: Must make a general offer to all other shareholders. Rule 26 of the Takeovers Code requires a mandatory general offer when a person's voting rights reach 30%, and the 2% creeper triggers an offer for further acquisitions above 30% within any 12 months.
4. Under the Main Board profit test, a listing applicant needs an aggregate profit of at least:
Answer: HK$80 million over three years. Since 1 January 2022 the Main Board profit test requires HK$80 million in aggregate over the three-year trading record (HK$35 million in the most recent year and HK$45 million for the two preceding years), with expected market capitalisation of at least HK$500 million.
5. A company lists on the Main Board by introduction. This means:
Answer: Its existing shares are listed without any offering or fundraising. In a listing by introduction, shares already held by existing shareholders are listed without any sale or fundraising. The other listing methods are offer for subscription, offer for sale and placing.
6. At the time of listing, a Main Board new applicant must generally have at least how many shareholders?
Answer: 300. Main Board Rule 8.08(2) requires a new applicant to have an adequate spread of holders, normally at least 300 shareholders at the time of listing, alongside the minimum public float.
7. A sponsor must keep records of its IPO mandate vetting and due diligence work for at least:
Answer: 7 years. Under the SFO and the Code of Conduct, licensed persons must keep records for at least 7 years, and a sponsor must be able to show what due diligence it actually did.
8. A licensed corporation is appointed as sponsor for an IPO. Under paragraph 17 of the Code of Conduct, it must:
Answer: Assign a dedicated Transaction Team with relevant knowledge and experience to the IPO. Paragraph 17 requires each sponsor to assign a Transaction Team with sufficient knowledge, experience and professional qualifications to each IPO, supported by adequate resources and clear reporting lines.
9. A Main Board listing applicant must appoint at least one sponsor no later than:
Answer: Two months before filing its listing application. Main Board Listing Rule 3A.02 requires a listing applicant to appoint at least one sponsor no later than two months before filing its listing application, and a sponsor must be a licensed corporation or an authorised financial institution permitted to carry out sponsor work.
10. A sponsor's parent company holds a significant shareholding in the listing applicant. The sponsor should:
Answer: Act only if at least one other sponsor is independent, and disclose its own lack of independence. Listing Rule 3A.07 requires at least one sponsor to be independent of the applicant. A sponsor whose group has a material interest in the applicant is not independent, so it can only act alongside an independent sponsor and must disclose its lack of independence.
11. In sponsor due diligence, an attitude of professional scepticism means the sponsor should:
Answer: Question what it is told and corroborate it with independent evidence. Paragraph 17 of the Code of Conduct requires sponsors to conduct due diligence with professional scepticism: probing management's answers, corroborating them with independent evidence and not accepting statements at face value.
12. Verification of a listing document involves:
Answer: Checking each material statement against source documents and confirmations. Verification tests each material statement in the listing document against source documents, third-party confirmations and other evidence, and the sponsor keeps notes showing that the work was done.
13. A listing document will include a valuation by an independent expert. Before relying on it, the sponsor should:
Answer: Assess the expert's competence, independence and the scope of its work. A sponsor must satisfy itself that an expert such as a valuer or reporting accountant is appropriately qualified and independent, and must understand the scope and basis of the expert's work, before relying on it.
14. After listing, a newly listed issuer must appoint a compliance adviser to:
Answer: Advise and guide it on complying with the Listing Rules after listing. The Listing Rules require a newly listed issuer to appoint a compliance adviser for the initial period after listing, to guide it on ongoing obligations such as disclosure, notifiable transactions and connected transactions.
15. When the SFC disciplines a licensed corporation for deficient sponsor work, the maximum fine it can impose is:
Answer: The greater of HK$10 million or three times the profit gained or loss avoided. Under the Securities and Futures Ordinance, the SFC may fine a licensed person up to the greater of HK$10 million or three times the profit gained or loss avoided, and may also publicly censure, suspend or revoke licences.

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Certification guide

Which HKSI papers do you need?: To become an SFC licensed representative (or a relevant individual at a bank), you usually pass three HKSI Licensing Examination papers: Paper 1 on regulation, Paper 7 on financial markets, and one paper for your regulated activity. Here's which one.

Paper 16 exam FAQ

How many questions are on the Paper 16 exam?

40 multiple-choice questions, with a time limit of 60 minutes. Format: closed book, computer-based.

What is the passing score for Paper 16?

70%.

How much does the Paper 16 exam cost?

HK$2,000 in Hong Kong (HK$2,450 at overseas Prometric centres). Fees change, so confirm with the HKSI Institute before you enrol.

Which languages is the Paper 16 exam offered in?

English or Traditional Chinese.

Where do I take the Paper 16 exam?

HKSI Institute computer-based test centre in Hong Kong, or Prometric centres outside Hong Kong.

Is this Paper 16 practice test free?

Yes. The 15-question practice test on this page is free, with an explanation for every answer and no signup. A free account also unlocks the complete study notes for the first topic. The full Paper 16 prep is Premium at HK$1,147 a month for this exam.

What's in the premium Paper 16 prep?

3,000 practice questions organized topic by topic (General Framework: 500; Listing Rules and the IPO Process: 500; Preparing an IPO Assignment: 500; Preparing a Listing Application: 500; Due Diligence: 500; After Prospectus Issuance: 500), 6 full-length timed mock exams of 50 questions, 800 flashcards and 60 comprehensive key notes split across all 6 topics, plus a mistakes bank and the Readiness Score.

Compare Paper 16 with other HKSI papers

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HKSI LE Paper 17: Regulation of Takeovers and Share Buy-backs

This paper is for Type 6 licensed persons who engage in or advise on matters under the SFC's Codes on Takeovers and Mergers and Share Buy-backs.

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Exam details are summarized from the official candidate information available in October 2026. HKSI Institute changes formats and fees, so confirm with Hong Kong Securities and Investment Institute (HKSI Institute) before you book. HKSIMock is not affiliated with the HKSI Institute or the SFC.

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