Mock paper #5

HKSI Licensing Examination Paper 1

A full paper drawn to the blueprint. Answers and worked explanations are at the back of this file.

Questions: 60
Time: 90minutes
Mark: 70%to pass
Paper: #5of 5

Single-user licence. You may print this file and write on it. You may not redistribute, resell or post it. © Sitonce 2026.

Before you start

Sit this the way you will sit the real one. A mock done in pieces over three evenings measures your notes, not your recall.

Questions

60

Minutes

90

Per question

90s

Started at

Set a timer for 90 minutes and do not stop it. Running over is the commonest way a prepared candidate fails, and the only place you can find that out safely is here.
Mark one answer for each question on the answer sheet.
Answer every question. There is no penalty for a wrong answer. A blank is a guaranteed zero and a guess is not.
Flag anything you are unsure of as you go. When you mark the paper, a question you flagged and got right is worth as much of your attention as one you got wrong - you do not yet know it, you guessed it.
When the timer runs out, turn to the Answers section at the back of this file. Mark the paper against the quick-reference key first, fill in the score table, and only then read the worked explanations.

What this paper covers

Area	Questions	Share
Topic 4 - Licensing and registration, and subsidiary legislation	14	23%
Topic 5 - Business conduct and client relations	11	18%
Topic 6 - Business operations and practices	10	17%
Topic 3 - Securities and Futures Ordinance	8	13%
Topic 7 - Participating in the Hong Kong exchanges	6	10%
Topic 8 - Accessing public capital	4	7%
Topic 9 - Market misconduct and improper trading practices	3	5%
Topic 1 - Regulatory overview of the Hong Kong financial industry	2	3%
Topic 2 - Principles of relevant Hong Kong law and the Companies Ordinance	2	3%
Total	60	100%

Answer sheet - paper #5

Circle one letter for each question.

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Paper #5

60 questions. 90 minutes.

1

To whom does the Code of Conduct for Share Registrars apply?

AAll Share Registrars and their employees, with senior managers judged on their control
BOnly Share Registrars licensed by the Commission for a regulated activity under the SFO
CAll Share Registrars, but not their employees, who answer to the Federation's own rules
DOnly Share Registrars maintaining a register for a company listed on the Stock Exchange

2

Which of the following is NOT a regulatory objective of the SFC under the SFO?

ATo assist the Financial Secretary in maintaining the financial stability of Hong Kong
BTo minimise crime and misconduct in the industry
CTo protect investors against losses arising from market movements
DTo reduce systemic risks in the securities and futures industry

3

Ferngate Advisory is a licensed corporation advising on corporate finance, and Chan is one of its licensed representatives. Who bears the paragraph 2 conduct of business requirements of the CFA Code?

AFerngate only, and its Senior Management must ensure compliance with them.
BFerngate and Chan equally, each answerable for its own compliance.
CChan only, because paragraph 2 governs individual conduct of business.
DFerngate only, with the Designated Compliance Officer answerable for them.

Worked explanations

The paper carries one for every question, at the back. These are the three above.

Q1 A Ch. 5: Topic 5 - Business conduct and client relations

Answer: A - All Share Registrars and their employees, with senior managers judged on their control

Because The Code is applicable to all Share Registrars and their employees, and a senior manager's level of responsibility, supervisory duties and level of control and knowledge are considered in applying it to him. Share Registrars Code 1.2

Senior management bears primary responsibility for maintaining appropriate standards of conduct and adherence to proper procedures by the Share Registrar. Share Registrars Code GP7

Where the other options lead

B.Licensing treated as the trigger. Share registrars are not licensed under the SFO for this work; the framework runs through membership of the Federation.
C.Employees excluded. The Code reaches employees directly, and disciplinary proceedings may be brought against a member of staff as well as the firm.
D.Application narrowed to register maintenance. The Code also covers registrars helping shareholders set up trust arrangements and providing probate and other services.

Q2 C Ch. 1: Topic 1 - Regulatory overview of the Hong Kong financial industry

Answer: C - To protect investors against losses arising from market movements

Because The six objectives cover fairness and orderliness of the market, public understanding, protection of the investing public, minimising crime and misconduct, reducing systemic risk, and assisting the Financial Secretary on financial stability. SFO s.4

Protecting the investing public means protecting them from misconduct and from an unfair market - not indemnifying them against investment loss. No regulator in Hong Kong guarantees returns.

Where the other options lead

A.Is an objective. Assisting the Financial Secretary on financial stability is the sixth objective.
B.Is an objective. Minimising crime and misconduct is expressly one of the six.
D.Is an objective. Reducing systemic risk is expressly one of the six.

Q3 A Ch. 5: Topic 5 - Business conduct and client relations

Answer: A - Ferngate only, and its Senior Management must ensure compliance with them.

Because Paragraph 2 applies to all Corporate Finance Advisers other than individuals, and it is the responsibility of the Senior Management of a Corporate Finance Adviser to ensure compliance with it. CFA Code 2

Under that paragraph the firm must ensure that its business is properly established and conducted and that it, its directors and its representatives are fit and proper and properly licensed. CFA Code 2.1

Where the other options lead

B.Firm and individual treated alike. Paragraph 2 expressly applies to Corporate Finance Advisers other than individuals, so Chan is not one of its addressees.
C.Individual read as the subject. The paragraph is dis-applied to individuals. Chan remains bound by the rest of the Code, but not by the conduct of business requirements in paragraph 2.
D.Compliance officer treated as the responsible party. A Designated Compliance Officer heads the compliance function, but paragraph 2 places responsibility for compliance on Senior Management.

Worked explanations

The paper carries one for every question, at the back. These are the three above.

Q1 A Ch. 5: Topic 5 - Business conduct and client relations

Answer: A - All Share Registrars and their employees, with senior managers judged on their control

Because The Code is applicable to all Share Registrars and their employees, and a senior manager's level of responsibility, supervisory duties and level of control and knowledge are considered in applying it to him. Share Registrars Code 1.2

Senior management bears primary responsibility for maintaining appropriate standards of conduct and adherence to proper procedures by the Share Registrar. Share Registrars Code GP7

Where the other options lead

B.Licensing treated as the trigger. Share registrars are not licensed under the SFO for this work; the framework runs through membership of the Federation.
C.Employees excluded. The Code reaches employees directly, and disciplinary proceedings may be brought against a member of staff as well as the firm.
D.Application narrowed to register maintenance. The Code also covers registrars helping shareholders set up trust arrangements and providing probate and other services.

Q2 C Ch. 1: Topic 1 - Regulatory overview of the Hong Kong financial industry

Answer: C - To protect investors against losses arising from market movements

Because The six objectives cover fairness and orderliness of the market, public understanding, protection of the investing public, minimising crime and misconduct, reducing systemic risk, and assisting the Financial Secretary on financial stability. SFO s.4

Protecting the investing public means protecting them from misconduct and from an unfair market - not indemnifying them against investment loss. No regulator in Hong Kong guarantees returns.

Where the other options lead

A.Is an objective. Assisting the Financial Secretary on financial stability is the sixth objective.
B.Is an objective. Minimising crime and misconduct is expressly one of the six.
D.Is an objective. Reducing systemic risk is expressly one of the six.

Q3 A Ch. 5: Topic 5 - Business conduct and client relations

Answer: A - Ferngate only, and its Senior Management must ensure compliance with them.

Because Paragraph 2 applies to all Corporate Finance Advisers other than individuals, and it is the responsibility of the Senior Management of a Corporate Finance Adviser to ensure compliance with it. CFA Code 2

Under that paragraph the firm must ensure that its business is properly established and conducted and that it, its directors and its representatives are fit and proper and properly licensed. CFA Code 2.1

Where the other options lead

B.Firm and individual treated alike. Paragraph 2 expressly applies to Corporate Finance Advisers other than individuals, so Chan is not one of its addressees.
C.Individual read as the subject. The paragraph is dis-applied to individuals. Chan remains bound by the rest of the Code, but not by the conduct of business requirements in paragraph 2.
D.Compliance officer treated as the responsible party. A Designated Compliance Officer heads the compliance function, but paragraph 2 places responsibility for compliance on Senior Management.

The rest of this mock paper comes with the course

HKSI LE Paper 1: the whole syllabus taught, the questions that test it, 5 timed mocks, and all 6 PDFs to print.