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Licensing Examination for Securities and Futures Intermediaries

Frequently Asked Questions

1. I have already passed certain papers of the Foundation Programme Examination

(FPE)/Financial Market Principal Programme Examination (PPE). Will these

qualifications be recognised for licensing purpose after the operation of Securities and

Futures Ordinance (SFO)?

Your FPE/PPE exam results will continue to be recognised by the Securities and Futures

Commission (SFC) for licensing purpose provided the exams are completed not more than 3

years prior to the date of application for licence. The papers you have passed in FPE/PPE

will be mapped to certain LE papers. The result is that you will be treated as if you have

passed the equivalent LE papers for licensing purpose. The table below shows the mapping

details.

Table 1 Mapping Table for FPE and LE for Licensing Purpose

FPE papers Equ ivalent LE Papers

FPE Paper 1 (Core) Paper 1 (Fundamentals of Securities & FuturesRegulation)And

Paper 7 (Financial Markets)

FPE Paper 2 Paper 8 (Securities)And

Paper 11 (Corporate Finance)AndPaper 12 (Asset Management)

FPE Paper 3 Paper 9 (Derivatives)

Table 2 Mapping Table for PPE and LE for Licensing Purpose

PPE papers Equivalent papers in LE

PPE Paper 1 (SFC) Paper 1 (Fundamentals of Securities & Futures

Regulation)AndPaper 5 (Regulation of Corporate Finance)AndPaper 6 (Regulation of Asset Management)

PPE Paper 2

(SEHK)

Paper 2 (Regulation of Securities)

PPE Paper 3(HKFE)

Paper 3 (Regulation of Derivatives)

If you intend to apply for licence under the new licensing regime using the FPE/PPE results,

you should read the above tables together with the SFC s Guidelines on Competence to

determine what additional LE papers you need to take in the LE (see illustration in Question 2

below).


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2. I have only done FPE Paper 1. What papers do I need to take in the LE in order to

obtain a representative licence for dealing in securities under the new licensing

regime?

The SFO introduces a single licensing regime with nine types of regulated activities (see

Table 3). Each licensed person will only be given one licence that sets out the type ofregulated activities he/she can perform.

Table 3 Regulated activities under SFO

Type Regulated Activity

RA1 Dealing in Securities

RA2 Dealing in Futures Contracts

RA3 Leveraged Foreign Exchange Trading

RA4 Advising on SecuritiesRA5 Advising on Futures Contracts

RA6 Advising on Corporate Finance

RA7* Providing Automated Trading Services

RA8 Securities Margin Financing

RA9 Asset Management

* There is no competence requirement for RA7.

Dealing in securities is classified as Regulated Activity 1 (RA1). According to the SFC s

Guidelines on Competence , for a representative to conduct RA1, he/she has to complete

Papers 1, 7 and 8 of the LE in order to obtain the required local regulatory framework paper

and recognised industry qualification.

Assuming you have passed FPE Paper 1 within 3 years prior to the date you apply for SFC

licence, according to the mapping table in Question 1, you will be regarded as passed Papers

1 and 7 of the LE. Thus, the only paper you need to take is LE Paper 8.

3. I need to sit for the new licensing examination. What is the best way for me to prepare?

You can prepare for the exam by self-studying. Study manuals are now available for

purchase at the HKSI office. As a supplement to your private study, our Training Department

will offer a series of Professional Courses on SFC Regulated Activities as listed in Table 3.

Please check our website at www.hksi.org or call the training hotline on 3120 6200 for more

information.


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4. Is there any relationship between the SFC s licensing requirements and HKSI

qualifications?

By taking the appropriate combination of LE papers, you will fulfill the SFC s competence

requirements for respective Regulated Activities, either as a Representative or as a

Responsible Officer. For details, please refer to the SFC s Guidelines on Competence .

Even if you do not wish to apply for licence with the SFC, on completion of a preset

combination of LE papers, you will still be awarded with HKSI qualifications.

There are two levels of certification: HKSI Practising Certificates and HKSI Specialist

Certificates. The following tables show the combination of LE papers you have to complete in

order to obtain HKSI s certificates.

Table 4 - HKSI Practising Certificates

LE Papers HKSI Practising Certificates

Papers 1 + 7 + 8 HKSI Practising Certificate Securities

Papers 1 + 7 + 9 HKSI Practising Certificate Derivatives

Papers 1 + 7 + 11 HKSI Practising Certificate Corporate Finance

Papers 1 + 7 + 12 HKSI Practising Certificate Asset Management

Table 5 - HKSI Specialist Certificates

LE Papers HKSI Specialist Certificates

Papers 1 + 2 + 7 + 8 HKSI Specialist Certificate Securities

Papers 1 + 3 + 7 + 9 HKSI Specialist Certificate Derivatives

Papers 1 + 5 + 7 + 11 HKSI Specialist Certificate Corporate Finance

Papers 1 + 6 + 7 + 12 HKSI Specialist Certificate Asset Management

Other than fulfilling the licensing requirements, each level of certification is also aligned to the

HKSI professional membership. Holders of the HKSI Practicing Certificate can apply for HKSI

Affiliate Membership while holders of HKSI Specialist Certificate will be eligible to apply for

HKSI Ordinary Membership if they possess three to five years relevant industry experience.


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5. I have already passed Papers 1, 7 and 8 and I have obtained the Practising Certificate

in Securities in July 2003. Will I be able to obtain another certificate if I pass some

other LE papers?

Certificates other than the Practising Certificate in Securities will be awarded to candidates if

they can pass the required additional LE paper(s) within the 3-year completion period (pleaserefer to the LE Examination Handbook for details of the 3-year completion period). However,

if a candidate passes the same LE paper(s) within the 3-year completion period, the same

certificate will NOT be issued in this case. (Also see Question 6 below)

6. Will I get an additional certificate if I have passed the same LE papers for a second time

within the 3-year completion period?

No. Additional certificate of the same type will be issued to candidates only when they have

completed ALL the LE examination papers offered by the HKSI within the required 3-year

completion period and have subsequently re-attempted and passed the required preset

combination of examination papers for the corresponding certificate(s). In this case,

candidates will be given another 3 years to complete the required examination papers. The

new completion period will commence from the date of the first re-attempted LE paper that

the candidate passes.

7. I have attempted and passed the following LE papers, what certificate(s) will I obtain

and when will the 3-year completion period expire?

Paper 8 on 21 June 2003

Paper 7 on 20 July 2003

Paper 1 on 23 August 2003

Paper 9 on 21 September 2003

According to the existing examination policy, you will be entitled to a Practising Certificate in

Securities in August 2003 and Practising Certificate in Derivatives in September 2003. The

3-year completion period will commence from 21 June 2003, and will expire on 30 June 2006.

And will I get a Specialist Certificate in Derivatives if I passed Paper 3 in August 2006?

The certificate will not be granted to you as you obtained a pass in Paper 3 after the 3-year

completion period, which expired in June 2006.

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