If you ever asked the questions above, then this article is specially written for you!
In order to better comprehend the specification of HKSI’s licensing details, we must first clarify the relationship between the various institutions. HKSI is the abbreviation for Hong Kong Securities and Investment Institute. If you ever considered obtaining license(s) for securities-related regulated activities, you would have been familiar with or have heard of its name and even the exams it holds, such as HKSI LE Paper 1, HKSI LE Paper 7, HKSI LE Paper 8, commonly known as securities licensing exam or 178 license.
HKSI is a private organization independent of the government. Its HKSI Licensing Exam (LE) has been approved by the Securities and Futures Commission (SFC) and is one of the competency requirements of application for license(s) as a representative and/or for the responsible officer. Therefore, those who wish to engage in regulated activities in the securities industry need to register for the LE exam at HKSI. However, one must note that passing the securities examination is only ONE OF THE licensing conditions to apply for a license, and passing the examination does not mean one’s successfully licensed! In other words, simply passing the exam, does not mean that you have a license. You must meet other licensing requirements, such as age, education, work experience, criminal record, and financial status before you can apply for licensure.
Securities and futures regulated activities licenses are issued by the Securities and Futures Commission (SFC). The SFC is independent of the Hong Kong government. It is a statutory body responsible for overseeing Hong Kong’s securities and futures markets. It is also the regulatory authority for the financial and securities industries in Hong Kong. According to the Competency Guidelines of the SFC, if you want to be qualified to conduct any type(s) of regulated activity, you need to obtain license(s) or registration(s) from the SFC. In regards to the Securities and Futures Ordinance, applying for and obtaining a license approved by the Securities and Futures Commission is a legal requirement for conducting regulated activities. To obtain a license, candidates must complete a specified combination of exam papers depending on which types of regulated activities are to be conducted. In other words, applying for an SFC license sometimes requires taking more than one exam and obtaining passing results. Although the SFC is responsible for licensing and supervision of licensees, the SFC is not responsible for organizing examinations. After candidates have passed the Licensing Exam, their employers must help the candidate to apply for a license on behalf of the candidates before they can engage in relevant regulated activities.
As for whether you should submit a license application to the SFC or the Monetary Authority, please use the link attached as a reference What Is the Difference Between SFC License And HKMA License?
Is there any difference between applying for a license and applying for a certificate? Do I need to apply for the certificate simultaneously after I obtained my license?
Applying for a license and obtaining an HKSI certificate are two different actions. The Securities and Futures Commission (SFC) will not issue certificates because they will not hold examinations, while the Hong Kong Securities and Investment Institute is responsible for organizing examinations and issuing certificates. Therefore, participating in the examination and having a certificate does not mean that they have a license from the SFC. All candidates taking the Licensing Exam must obtain passing grades in a specified combination of exams within three years. There are two kinds of qualification certificates recognised by the HKSI:
- HKSI Practising Certificates
- HKSI Specialist Certificates
(For details, please refer to:
How to obtain HKSI certificate? Will the certificate become invalid?
The HKSI certificate is a certificate issued by HKSI, which proves that students have successfully obtained a pass in the specified test combination within 3 years. HKSI provides a variety of certificates to allow students to prove their knowledge in their targeted field(s) by passing a set of related exams, including “securities”, “derivatives”, “credit rating services”, and “institutional financing” and “asset management”, the above categories are divided into “HKSI Practising Certificates” and ” HKSI Specialist Certificates ” certificate scheme. The “HKSI Practising Certificates” certificate refers to the completion of the exam papers designated in becoming a licensed representative. The “HKSI Specialist Certificates ” certificate refers to the completion of the examination papers for the designated licensed representative and responsible personnel. If you are exempted from Exam Papers 7 to 12 when you apply for an SFC license, but you did not take Exam Papers 7 to 12, you will not be awarded any certificate.
For free information, please refer to: HKSI LE Exemption
The HKSI certificate is indefinitely valid. Just like a certificate of completion obtained after university studies, it is a lifetime valid certificate. However, the actual effect of the HKSI certificate is actually minimal. In contrast, the “HKSI Practising Certificates” or “HKSI Specialist Certificates ” certificate in the “Securities” category can exempt you from taking the insurance intermediary qualifying examination IIQE in your entire life – Paper 5-Investment-linked long-term insurance. In addition, its function is to add a line of seemingly professional achievements to your resume, which can be used to show off to customers, family and friends.
Do I need a certificate to apply for licensure?
The answer is no, and holding a certificate does not mean having a license. Basically, apart from decorating your resume and exempting you from taking the Insurance Intermediary Qualifying Examination (IIQE) Paper 5, the HKSI certificate is not much useful. As the IIQE Paper 5 – Investment-Linked Long Term Insurance exam overlaps with HKSI LE Securities Exam 1, 7, 8’s content, so if you have passed HKSI LE Papers 1, 7, 8 , you don’t need to take IIQE Paper 5. However, it needs to be added that if you have not taken the HKSI LE Papers 7, 8 but are exempted through academic qualifications or work experience, you will not be exempted from IIQE Paper 5.
For details of IIQE exemption, please refer to: Insurance Intermediary Qualification Examination (IIQE) Exemptions
Will HKSI LE qualifying scores become invalid?
According to the HKSI official exam manual, the HKSI LE exam results are valid for 3 years. If the candidate has not used the results to apply for a license within 3 years after the exam, the results will be invalid. In other words, just like the well-known IELTS and TOEFL, or Putonghua proficiency test, the results are only of reference value for a certain period of time, so subsequently it will lose its function. If students need to take more than one exam to obtain a license, they must ensure that they pass the required exam papers set and apply for a license within 3 years (from the date of the first exam).If students took the written test, the results will not be announced on the day of the test, but still, the validation date will be calculated from the test day for 3 years.
For example: if a student takes the HKSI LE Paper 1 exam on January 1, 2021, but still needs to take the HKSI LE Papers 7 and 8 in order to apply for a license, the student must take the remaining HKSI LE Papers before January 1, 2024; in this case the student must pass paper 7 and 8 before he/she can start the procedures for applying a license. If the student still fails HKSI LE Papers 7 or 8 on January 2, 2024, the results of HKSI LE Paper 1 will be invalid, and the 3-year limit must be calculated from the test day of the next subject of which the student obtained a passing grade. As long as you have completed a combination of exams and successfully applied for a license within the 3 year period; whilst under the conditions that the license is not terminated or revoked, you do not need to retake the exam and the license will remain valid.
When do I need to take only one exam? When do I have to take multiple exams? Who decides how many subjects I need to take?
To know how many exams you have to take, you must refer to the Competency Guidelines issued by the Securities and Futures Commission. Papers 2 to 12 are divided into two categories for the HKSI LE exam. Papers 2 to 6 are the exams that are for Responsible Officers (ROs) or Executive Officers (EOs); while papers 7 to 12 are for sales representatives ( Rep). A Responsible Officer is a person in charge of a licensed corporation at senior management level. An Executive Officer is the senior management of a registered institution, they are responsible for overseeing the operation of the entire regulated activity in the company to ensure compliance with SFC and its legal requirements. To become a Responsible Officer requires at least 3 years of experience in the securities industry, of which at least 2 years must include experience in managing subordinates. If you have never worked in the securities industry, you should start by becoming a licensed representative.
For the difference between Responsible Officer and Executive Officer, please reference the video link below: https://www.youtube.com/watch?v=JIEAwQfBUiE
Exam papers required to be taken by licensed representatives
The HKSI LE exam has 14 different exam papers. Which ones do you need to take? In fact, it depends on what activities you want to engage in, in other words, what services or products you want to sell or provide. For example, if you want to trade securities products such as Hong Kong stocks, US stocks, bonds, etc. on behalf of your clients, you need to take HKSI LE papers 1, 7, and 8. Or if you want to work in an asset management company and deal with products related to funds or discretionary accounts, you may need papers 1, 7, and 12. You can first refer to the following chart to evaluate what combination of exam papers you need to take, and then refer to the exemption conditions to determine whether you need to take the entire combination of exam papers.
For exemption information, please refer to HKSI LE Exemption
Exam papers to be taken by Responsible Officers
The examination papers of responsible officers are also based on the same principles as the examinations to be taken by the licensed representative. It depends on the type of activity you are engaged in, that is, the financial products/services that the company you will work for want you to regulate. For example, if you need to conduct Type 2 and 5 regulated activities, that is, to conduct dealing in futures contracts or to advise on future contracts, you need to take HKSI Paper 1 and 3. If you have taken HKSI LE Paper 1 and applied for a license to become a licensed representative before becoming a responsible officer, you do not need to take the exam again. So just take the HKSI LE Paper 3. You can first refer to the following chart to estimate what combination of examination papers you need to take and then refer to the exemption conditions to determine whether you need to take the entire combination of examination papers.
For exemption information, please refer to HKSI LE Exemption
How can we help?
2CExam provides HKSI LE, IIQE, EAQE and SQE related exam preparation materials. We sell mock question banks for HKSI LE Papers 1, 2, 3, 5, 6, 7, 8, 9, 12 in Chinese and English; and bibles for HKSI LE Papers 1, 2, 6, 7, 8 in Chinese. We also offer 1 on 1 tutorial services. Besides, we have also made free tutorial videos for HKSI LE Papers 1, 2, 6, 7, 8, 12 and posted on public channels such as Youtube/ Bilibili/ Tencent/ Iqiyi. 2CExam has been an exam training expert for years. Should you need any help please visit www.2cexam.com or contact us through:
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