Licensing Examination for Securities and Futures Intermediaries

Paper 1 Fundamentals of Securities and Futures Regulation Topic 1: Regulatory Overview of the Hong Kong Financial Industry 1 2 3 Topic 3: The Securities and Futures Ordinance (SFO)

English Version

Financial products and services and their regulation Regulatory authorities The Securities and Futures Commission (SFC) Hong Kong Exchanges and Clearing Limited Participants and intermediaries in the Hong Kong financial market ***** Topic 2: Principles of relevant Hong Kong Law and the Companies Ordinance

Background to making the SFO Part I Preliminary Part II The SFC its Constitution, Objectives, Functions, Powers and Duties Part III Exchange Companies, Clearing Houses, Exchange Controllers, Investor Compensation Schemes and Automated Trading Systems Part IV Offers of Investments Part V Licensing and Registration Part VI Capital Requirements, Client Assets, Records and Audit Relating to Intermediaries Part VII Business Conduct of Intermediaries Part VIII Supervision and Investigations Part IX Discipline Part X Powers of Intervention and Proceedings Part XI The Securities and Futures Appeals Tribunal Part XII Investor Compensation Part XIII The Market Misconduct Tribunal Part XIV Offences Relating to Dealings in Securities and Futures Contracts

2 3 4 5

5 6 7

1 2

Outline of Hong Kongs Legal System Companies Ordinance and related matters Structure of companies Share capital and debentures Meetings and procedures Shareholders, directors and officers Audits and investigations Winding up and liquidation ***** 13 14 8 9 10 11 12

Syllabus

15 16 17

Part XV Disclosure of Interests Part XVI Miscellaneous Part XVII Repeals and Related Provisions ***** 1

Topic 6:

Business Operations and Practices

The Management, Supervision and Internal Control Guidelines for Persons Licensed by or Registered with the SFC Money laundering and terrorist financing Money laundering and terrorist financing: Guidance Note issued by the SFC

Topic 4:

Licensing and Subsidiary Legislation

1 2

Licensing the SFC regime Capital Requirements Securities and Futures (Financial Resources) Rules 3 4 5 6

Online trading and advising Automated trading services Short selling requirements additional to those in SFO Unsolicited calls Securities and Futures (Unsolicited calls Exclusion) Rules

3 4 5 6

Securities and Futures (Client Securities) Rules Securities and Futures (Client Money) Rules Securities and Futures (Keeping of Records) Rules Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules Securities and Futures (Accounts and Audit) Rules ***** Topic 5: Business Conduct and Client Relations

Insurance cover for intermediaries Securities and Futures (Insurance) Rules ***** Topic 7: Securities, Options and Futures

Dealing in securities Operations on the Stock Exchange of Hong Kong (SEHK) Securities Margin Financing

1 2 3 4

Code of Conduct for Persons Licensed by or Registered with the SFC Fund Manager Code of Conduct Corporate Finance Adviser Code of Conduct Code of Conduct for Share Registrars ***** 2 3 4

Traded Options on the SEHK Dealing in Futures Contracts on the Hong Kong Futures Exchange Advising in securities and futures contracts *****

English Version

Licensing Examination for Securities and Futures Intermediaries

Topic 8:

Other SFC Regulated Activities

4 5

Personal Data (Privacy) Ordinance Compliance and related issues Corporate governance Senior management, directors and minority shareholders *****

Corporate Finance and Corporate Finance Advisers Listing Rules issued by the SEHK Take-overs and Mergers and Share Repurchases

English Version

Asset management Under the SFO Under the Mandatory Provident Fund Schemes Ordinance

Leveraged Foreign Exchange Trading ***** Topic 9: Market Misconduct, Improper Trading Practices and Compliance

Market misconduct under the SFO Definition of market misconduct in the SFO Insider dealing False trading Price rigging Stock market manipulation Disclosure of information about prohibited transactions Disclosure of false or misleading information Conduct not to constitute market misconduct (Safe Harbour Rules) Fraud and deception

2 3

Some improper trading practices Investor Compensation Arrangements