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Hong KongWhat is HKSI Paper 1, and why does the SFC care about it?
HKSI Paper 1 is the Hong Kong licensing exam on securities and futures regulation. Sixty multiple-choice questions, 90 minutes, 70% to pass, which is 42 of 60. Closed book, HKD 1,800, sat on a computer. The SFC treats a pass as evidence you understand the rules before you are licensed.
Somebody in compliance has probably told you to "get Paper 1 done" and left it there. That is how most candidates meet this exam: as a box on an onboarding checklist, with no explanation of what it is or why it exists. It is worth ten minutes to understand it properly, because the shape of the exam tells you almost everything about how to prepare for it.
What Paper 1 actually is
The full name is the Licensing Examination for Securities and Futures Intermediaries, Paper 1 - Fundamentals of Securities and Futures Regulation. It is set and run by the Hong Kong Securities and Investment Institute, usually shortened to the HKSI Institute. The Institute is not the regulator. The Securities and Futures Commission is, and the SFC recognises the Institute's papers as one of the ways an applicant can show they meet the competence requirement for a licence.
So there are two organisations in play. HKSI writes and marks the paper. The SFC decides what a pass is worth.
- Full name
- Licensing Examination for Securities and Futures Intermediaries, Paper 1 - Fundamentals of Securities and Futures Regulation
- Set by
- HKSI Institute
- Recognised by
- Securities and Futures Commission (SFC)
- Questions
- 60 multiple choice
- Time
- 90 minutes, so 1.5 minutes a question
- Pass mark
- 70% - 42 of 60
- Format
- Multiple choice, computer-based, closed book
- Languages
- English and Traditional Chinese
- Fee
- HKD 1,800
- Sittings
- Monthly, at HKSI Institute examination centres in Hong Kong
- Syllabus
- v3.5
- Topics
- 9
What the exam tests
Regulation. Not markets, not maths, not products in any depth. The syllabus is built around the Securities and Futures Ordinance, the subsidiary legislation under it, and the SFC's codes and guidelines. You are being asked whether you know what the rules require, who they apply to, and what happens when somebody breaks them.
Nine topics, sixty-six second-level syllabus headings between them. Here they are.
| Topic | What sits under it |
|---|---|
| 1. Regulatory overview of the Hong Kong financial industry | Who regulates what: the SFC, HKEX, the other authorities, and the intermediaries in the middle |
| 2. Principles of relevant Hong Kong law and the Companies Ordinance | Enough of the legal system to make sense of the rest, plus the Companies Ordinance |
| 3. Securities and Futures Ordinance | The Ordinance Part by Part, from the SFC's own powers through to disclosure of interests |
| 4. Licensing and registration, and subsidiary legislation | Licences, capital, client assets, records, contract notes, audit, regulated activities |
| 5. Business conduct and client relations | The Code of Conduct and the other SFC codes for specific businesses |
| 6. Business operations and practices | Internal controls, anti-money laundering, electronic trading, data privacy |
| 7. Participating in the Hong Kong exchanges | How trading in securities, options and futures on the exchanges actually works |
| 8. Accessing public capital | Listing rules, takeovers, authorised products |
| 9. Market misconduct and improper trading practices | Insider dealing, market manipulation, unsolicited calls, enforcement |
Topic 3 is the big one. Eleven of the sixty-six headings sit under the Ordinance alone, and it is the topic most people underestimate on a first read of the syllabus. If you want the detail, the full syllabus breakdown goes topic by topic.
Who has to sit it
Broadly, anyone applying to the SFC to be a licensed representative or a responsible officer for a regulated activity, who does not already hold a recognised alternative qualification or an exemption. Paper 1 is the common paper. Almost everybody sits it, then adds a second paper matched to the activity they will actually carry on.
- New joiners at brokers, asset managers, corporate finance houses and private banks
- People moving from an unregulated role into a regulated one at the same firm
- Anyone whose employer wants the licence in place before the desk seat is confirmed
- Career changers who want the qualification on the CV before they start applying
Which second paper you need depends on your regulated activity, and getting that wrong is an expensive mistake. Our note on which HKSI papers you actually need covers the pairings.
Is it hard?
Roughly half the room fails. The mean pass rate over the twelve months to June 2026 was 51.9%, so about 48.1% of candidates did not get through. That is a genuinely high failure rate for an exam with no essay, no calculation and no interview.
Here is the opinion, and it is the one that matters most: Paper 1 is not conceptually difficult, and treating it as if it were is how people fail it. There is nothing in the syllabus a reasonably bright person cannot understand on first reading. The problem is volume and precision. Sixty-six headings of rules, and the questions turn on which body has the power, which threshold applies, which code covers which business. You do not fail because you did not understand. You fail because you half-remembered.
42 of 60. That is the pass standard, and it means you can get eighteen questions wrong. Candidates who track their mock scores against 42 rather than against a vague sense of "feeling ready" tend to book the exam at the right time.
What a pass gets you, and what it does not
A pass is a qualification, not a licence. You still have to be sponsored by a licensed corporation or apply through your employer, satisfy the SFC on fitness and properness, and meet the other competence requirements for your regulated activity. Passing Paper 1 removes one obstacle. It does not put your name on the SFC public register.
The concession: for a lot of people this exam is less of an ordeal than the pass rate suggests. A large share of failures are underprepared sittings booked to hit an employer's deadline, not sincere attempts that came up short. If you give it real study time, the paper is fair and the questions are clean.
Where to start
Read the syllabus once, front to back, before you buy anything. It is free, it is the actual scope of the exam, and it takes under an hour. Then sit some questions cold to find out where you are - a set of practice questions will tell you more in twenty minutes than a week of reading will. After that, work out your timeline with the study-hours estimate and book the sitting.
Common questions
Is HKSI Paper 1 the same as the SFC exam?
People use the names interchangeably, but they are different things. HKSI Paper 1 is an examination set by the HKSI Institute. The SFC is the regulator that recognises a pass as satisfying part of the competence requirement for a licence. The SFC does not run the exam.
How many questions are on HKSI Paper 1?
Sixty multiple-choice questions in 90 minutes, which works out at 1.5 minutes a question. The pass mark is 70%, so you need 42 correct. HKSI does not publish how many questions come from each of the nine syllabus topics.
How much does HKSI Paper 1 cost?
The examination fee is HKD 1,800. That covers one sitting. If you fail and resit, you pay the fee again, which is the main reason a cheap first attempt is a false economy. Check the HKSI enrolment page for any current concessions.
Can I take Paper 1 in Chinese?
Yes. The paper is offered in English and Traditional Chinese. You choose your language when you enrol, and you should choose the one you read regulatory material in fastest, not the one you speak best.
Do I need Paper 1 if I already work in finance?
It depends on whether your role is a regulated activity under the Ordinance and whether you hold a recognised alternative qualification or exemption. Working in finance is not itself an exemption. Check the SFC's competence requirements against your specific job before assuming you are covered.