HKSI Paper 1 Practice Exam

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• Which is the highest court in HK?
• Type 2 regulated activity refers to which?
• What is IOSCO?
• What is the purpose of AML customer due diligence?
• What does 'best execution' require when handling client orders?
• What is HKEX responsible for?
• How should whistleblowing be handled within a firm?
• What is the role of the Joint Financial Intelligence Unit (JFIU) in HK AML/CFT?
• Which statement about SFC independence is true?
• Most important matter from Stock Exchange Ordinance 1973?
• Who considers more serious criminal cases (excl. very serious offences such as murder, manslaughter, rape) and civil cases involving disputes up to HK$3M?
• Which of the following sources is acceptable when applying the 'best information available' principle?
• How should client communications be stored and maintained?
• Under a direct investment mandate, who must authorize each trade?
• Is notice required for an ordinary resolution?
• Which is the Type 7 regulated activity?
• When handling cross-border clients and information, which requirement is essential?
• Which two bodies maintain active liaison on issues of common interest despite not having a direct regulatory link?
• Potential consequences of non-compliance with HK SFO/Code rules?
• Which of the following is a Type 5 regulated activity?
• Which of the following best describes Type 1 regulated activity?
• Which is the Type 9 regulated activity?
• How should liquidity risk be managed in trading operations?
• How can firms ensure fair treatment for all clients?
• Market participants should be represented on which bodies?
• Which best describes the standard for gifts and entertainment under the Code of Conduct?
• Which of the following is a qualification for directors?
• Which entity enforces HKEx listing, trading, clearing, and settlement rules?
• Under data protection principles, which statement best describes how client data should be handled?
• Which is the 2nd lowest court in HK?
• Which is the Type 8 regulated activity?
• Who has access to information from the SFC upon request as part of its obligations to the Financial Secretary?
• Under CO, which statement is true about the three types of companies?
• Which organization supervises the Hong Kong Exchanges and Clearing Limited (HKEx)?
• Directors of the SFC are appointed by whom?
• Which statement best reflects the purpose of a complaints handling policy?
• What should be included in accurate trade confirmations?
• What is the purpose of risk disclosures in advertising and promotional materials?
• What does SEHK do?
• For an ordinary resolution to pass, it must be passed at what kind of meeting?
• How many directors are required in a private company?
• In handling cross-border client data, what is essential?
• Under CO, what resolutions do not need to be signed by all members?
• What is the purpose of a complaints handling policy?
• How many directors are required in a public co?
• What are the basic product knowledge requirements for regulated staff?
• What does maintaining professional skepticism entail regarding data quality?
• How should staff handle personal dealing and front-running risks?
• What is the proper initial response to allegations of market misconduct by staff?
• HKEx is responsible for?
• Which entities have disciplinary powers over their participants similar to the SFC?
• Which is the lowest court in HK?
• Which function is entrusted to the Enforcement Division?
• What are three types of companies?
• Which courts comprise the High Court in Hong Kong?
• How should a firm manage conflicts of interest?
• MPF stands for?
• To whom may the SFC disclose confidential information?
• Which of the following is not a power SFC can exercise against a breach of guidelines?
• What is subsidiary legislation?
• The Stock Exchange Ordinance 1973 had which effect?
• What is the primary purpose of the SFC Code of Conduct for personnel engaged in regulated activities?
• Which of the following is a ground for director disqualification by court order?
• Commissioner of Insurance reports directly to ?
• What is required to make resolutions effective?
• Who can give orders to SFC about how SFC performs its functions?
• What is the purpose of administrative tribunals?
• Non-executive directors of the SFC consist of?
• Who is the main regulator for authorized financial institutions (AFI) in Hong Kong?
• Why are record-keeping obligations important for regulated firms?
• What is the primary duty of the Financial Secretary?
• Under the SFO, which body is empowered to make rules?
• Why is continuing professional development (CPD) important for regulated professionals?
• What is a key obligation of firms regarding suspicious transaction reporting (STRs)?
• Pension plan setup is an obligation of which party?
• Which of the following is an independent tribunal or panel related to the SFC?
• Which of the following best aligns with the 'gifts and entertainment' standard?
• Match the regulated activity type with its description: asset management.
• What is the relationship of HKEX and SEHK?
• Type 4 regulated activity?
• What does it mean to be a 'recognized' exchange controller?
• Which principle is central to privacy by design in data handling?
• Max number of members (current) in a private company?
• Insider dealing is prohibited when?
• Match the regulated activity type with its description: providing credit rating services.
• What does the MPFA stand for?
• Annual General Meeting should be held?
• Under the Securities and Futures Ordinance, which body grants the SFC the power to make rules?
• What is the share capital requirement under CO?
• What does maintaining professional skepticism entail in client interactions?
• One of the committee's aims is that the market should be free from manipulation.
• The HKEX is recognized as an exchange controller by which authority under which statute?
• What is the recommended approach when conflicts of interest arise?
• Which court has unlimited jurisdiction in respect of criminal and civil cases and also hears appeals from tribunals and criminal appeals from Magistrates' Courts?
• HKEX is a parent entity for which of the following wholly owned subsidiaries?
• How do ethics and professionalism underpin HKSI Paper 1 topics?
• Which statements correctly describe Professional Investors?
• The predecessor of SFC is the office of the Commissioner of Securities.
• Which is the Type 6 regulated activity?
• Whistleblowing channels should include which feature set?
• What must a notice for a special resolution specify?
• Type 3 regulated activity refers to which?
• Which activities require licensing or registration under the Securities and Futures Ordinance in Hong Kong?
• What must promotional materials describing financial products or services include?
• Which statement is false about administrative tribunals?
• Which control best mitigates mis-selling risk?
• Match the regulated activity type with its description: advising on futures.
• Which of the following is a component that should be included in a client risk disclosure for complex products?
• Which statement correctly describes fair treatment of clients?
• Which are High Courts?
• Which threshold is required for a special resolution to be passed?
• Type 1 regulated activity?
• Which two bodies share responsibility for authorizing MPF products and marketing materials?
• Market manipulation is defined as actions designed to mislead or distort the market price or volume. Which option best reflects this definition?
• What does the SFC do with HKEX and SEHK?
• Which statement aligns with best practice for risk disclosures?
• Why is full disclosure of costs and charges important?
• How should client money be treated to safeguard client assets?
• Which statement best describes SFO-regulated activities?
• Which dept. will hear appeals against decisions made by SFC relating to registration of intermediaries?
• How should a firm handle a client complaint?
• Which division of the SFC supervises exchanges and clearing houses?
• Which item is included in accurate trade confirmations, aside from date and instrument?
• Which dept./ division detects and investigates market misconducts?
• What is the difference between internal controls and external regulation?
• Under HKSI standards, an advertisement must be...
• The Securities Review Committee under Ian Hay Davison was formed when?
• How many clearing houses are there in HK?
• What is the Code’s stance on advertising and promotional materials?
• Who supervises SEHK's operation of the HK stock market?
• Administrative tribunals are established by whom?
• What is HKEX?
• The committee proposed that regulation should be independent of the government.
• Non-executive directors of the SFC are drawn from which fields?
• Can a company loan to a director or provide security for such a loan?
• Ordinary vs. special resolutions: which standard applies to ordinary resolutions?
• Which organization is associated with the Chinese Gold & Silver Exchange Society?
• Which court hears appeals in all civil and criminal cases arising from proceedings from the Court of First Instance, the Competition Tribunal, the District Court and the Lands Tribunal?
• What are the obligations of SFC to Financial Secretary?
• Is there a direct regulatory link between the SFC and the Company Registry?
• Which statement about storing client communications for regulatory review is accurate?
• The chairman of the Exchange Fund Advisory Committee is held by whom?
• Which statement best captures the Code's stance on advertising?
• What does 'best information available' mean in research and recommendations?
• SFC and MPFA share responsibility in which areas?
• Which is the 2nd highest court in HK?
• Which statement best describes CPD's aim in HKSI Paper 1?
• What are the blue sky laws?
• The philosophy and system of HK regulatory framework is characterized as:
• Distinguish between suitability and appropriateness tests.
• How many members are in the IOSCO?
• Which dept. is independent from the government civil service?
• Which of the following best identifies the Insurance Agent Registration Board?
• What are SFC's delegated regulatory committees?
• Which dept./ div sets the continuous professional training requirement?
• Which is the Type 10 regulated activity?
• What are the wholly owned subsidiaries of the HKEX?
• Who heads the Court of Final Appeal?
• What can SFC do to someone who breaches SFC code and guidelines?
• Which items should a client risk disclosure statement for complex products include?
• Which statement best describes the proposed regulatory approach?
• What describes the PDPO interaction with financial services operations?
• Type 2 regulated activity?
• What is the purpose of suspicious transaction reporting under AML/CFT?
• What tribunals and panels are independent of the SFC?
• Which of the following best describes mis-selling risk in investment recommendations?
• HK Stock Exchange began regulation in?
• Which of the following is another role of SFC?
• Which elements are required to pass a special resolution?
• Type 4 regulated activity refers to which?
• Which of the following is a role of SFC?
• What happens when an investigation is ordered by court?
• What is a key control for price-sensitive information?
• Which of the following is true about SEHK's market operation?
• Insurance agents are registered with?
• Which of the following is listed as an investor-protection objective?
• Which organization is primarily responsible for managing the exchange fund?
• What does the CGSE stand for?
• Match the regulated activity type with its description: securities margin financing.
• Which department recommends changes to the listing rule?
• Which factor is NOT typically considered in assessing best execution?
• Know-Your-Client (KYC) is essential for what reason?
• Does the Registrar of Companies regulate companies, limited partnerships, trustees, money lenders or open-ended funds directly?
• Which statement is true about the share capital under CO?
• Who manages the exchange fund?
• What constitutes a regulated activity requiring SFC oversight when dealing with financial products?
• What is the relationship between HKEX and SEHK?
• What does 'privacy by design' imply in client data handling?
• Match the regulated activity type with its description: providing automated trading services.
• Committee of inspection can be set up by?
• What is a 'Fit and Proper' test in the SFC licensing framework?
• Disputes between a licensed trader and a client on an interest rate swap may be referred to which forum?
• How should risk disclosures be presented to clients?
• How should a related party transaction be addressed to avoid conflicts?
• What is a key purpose of record-keeping obligations for regulated firms?
• Which dept processes licensing applications in SFC?
• Why would the Financial Secretary appoint an inspector if there is no court order?
• Why is independence of research important for investment advice?
• What is the purpose of CPD in HKSI Paper 1?
• What is the role of the compliance function in a regulated firm?
• What is the role of a compliance officer with regard to outsourcing?
• Which of the following is NOT a delegated regulatory committee of the SFC?
• How should access to price-sensitive information be controlled?
• What is the difference between a direct investment mandate and a discretionary mandate?
• Which of the following is not a type of company under CO?
• Insider dealing is prohibited at all times. Which statement about this rule is true?
• Type 3 regulated activity?
• What kind of company does not have share capital?
• Which court deals with least serious criminal offences and impose smaller sentences than District Court?
• Which statement best describes the PDPO’s relevance to client data?