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Sponsor and takeovers papers · Last updated October 2026

HKSI LE Paper 17: Regulation of Takeovers and Share Buy-backs: free practice test

This paper is for Type 6 licensed persons who engage in or advise on matters under the SFC's Codes on Takeovers and Mergers and Share Buy-backs. It covers the regulatory framework, the Ten General Principles, offer structures including mandatory offers and whitewashes, the duties of offerors, offeree boards and financial advisers, dealing and disclosure rules, share buy-backs, and enforcement by the Executive and the Panel.

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About the Paper 17 exam

This paper is for Type 6 licensed persons who engage in or advise on matters under the SFC's Codes on Takeovers and Mergers and Share Buy-backs. It covers the regulatory framework, the Ten General Principles, offer structures including mandatory offers and whitewashes, the duties of offerors, offeree boards and financial advisers, dealing and disclosure rules, share buy-backs, and enforcement by the Executive and the Panel.

What's on the exam

Paper 17
General Framework
6 key facts
Scope and Application of the Codes
6 key facts
Takeover Structures
7 key facts
Offeror and Offeree Obligations
6 key facts
Obligations of Financial Advisers
6 key facts
Dealings and Special Deals
6 key facts
Share Buy-backs
6 key facts
Case Studies and Enforcement
6 key facts

Each branch is a topic in the official outline. Members see every key fact on the full mind map. Read the free study guide →

How to pass the Paper 17 exam

  • 40 questions in 60 minutes is 90 seconds each.
  • You need 70%: 28 out of 40, so you can only miss 12.
  • Master Rule 26.1: the 30% trigger and the 2% creeper in the 30% to 50% band, plus the Rule 26.3 minimum offer price.
  • Know who does what: the Executive administers the Codes, the Panel reviews decisions and disciplines, and the Takeovers Appeal Committee hears appeals from the Panel.

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What's in the premium Paper 17 prep

Premium Paper 17 prep is studied one topic at a time. Each step starts with that topic's key notes and flashcard deck, then its own question sets of 25, so you master one topic before you move to the next. When every topic is strong, the 6 full mock exams show you're ready.

3,000practice questions, every answer explained
6full-length mock exams, 50 questions each, timed
800flashcards with spaced repetition, sorted by topic
60comprehensive key notes across 8 topics

Your step-by-step study path

  1. 1
    General Framework8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  2. 2
    Scope and Application of the Codes8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  3. 3
    Takeover Structures8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  4. 4
    Offeror and Offeree Obligations8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  5. 5
    Obligations of Financial Advisers7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  6. 6
    Dealings and Special Deals7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  7. 7
    Share Buy-backs7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  8. 8
    Case Studies and Enforcement7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25
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  9. Final step: 6 full mock exams50 questions each, timed like test day. Pass them, then book your exam.
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Read the complete Paper 17 study notes for “General Framework”

Our first full set of comprehensive notes, about 10 minutes of reading: Why the Codes exist · Where the Codes sit in the framework · Licensing and the TC Adviser · Other laws and rules that matter · The SFC's powers, a worked exam example, the traps examiners use and a one-minute recap. Create a free account to read it and see how premium notes work before you decide.

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Study tools included

3,000 practice questions

3,000 exam-style questions per exam, organized topic by topic in sets of 25. Every answer explained, with the rule it comes from.

6 full mock exams

6 full-length timed mock exams per exam, with real question counts and time limits, so test day feels like practice day.

Exam Readiness Score

One 0 to 100 number that tells you when you're ready to book. Reach 80 and you're covered by our Pass Guarantee.

800 flashcards + spaced repetition

800 flashcards per exam, in a deck for each topic, that come back right before you'd forget them. Five minutes a day keeps every number fresh.

60 comprehensive key notes

60 key notes per exam, split across its topics and each explained in full: the concepts, worked exam examples, the traps examiners use and a quick recap. Your first set is free with an account.

Mind maps

See the whole exam on one screen: every topic and the facts under it.

Sample questions with answers

These are the questions in the free test above, with answers. Try the test first. You'll learn more by getting some wrong.

1. Under the Securities and Futures Ordinance (SFO), advising on corporate finance, including advising on matters under the Codes, is which regulated activity?
Answer: Type 6 advising on corporate finance. Type 6 is advising on corporate finance under Schedule 5 to the SFO. Individuals who engage in or advise on matters under the Codes take this paper to meet their competence requirement.
2. The Codes on Takeovers and Mergers and Share Buy-backs have which legal status?
Answer: They are non-statutory codes administered by the SFC's Executive. The Codes are non-statutory and are administered on a day-to-day basis by the Executive Director of the SFC's Corporate Finance Division (the Executive). Breaches can still lead to Panel disciplinary action and SFC licensing consequences.
3. Which of the following is one of the Ten General Principles of the Codes?
Answer: All shareholders must be treated even-handedly. The first General Principle is that all shareholders are to be treated even-handedly. The General Principles underpin every rule of the Codes and apply to all persons covered by them.
4. A party is dissatisfied with a decision of the Takeovers and Mergers Panel. Which body hears appeals against Panel decisions?
Answer: The Takeovers Appeal Committee. The Executive administers the Codes day to day, the Panel reviews Executive decisions and handles disciplinary matters, and the Takeovers Appeal Committee (TAC) hears appeals from the Panel.
5. A fund holds 31% of the voting rights of a listed company. Over the next six months it buys a further 2% in the market. Under Rule 26.1 of the Takeovers Code, this:
Answer: Triggers a mandatory general offer, because a holder of 30% to 50% acquired more than 2% in 12 months. Rule 26.1 requires a mandatory offer both when a person first crosses 30% of voting rights and when a person holding between 30% and 50% acquires more than 2% in any 12-month period (the creeper).
6. A new investor proposes to subscribe for new shares that would take its stake to 35% of a listed company. The existing controlling shareholder and its associates will not vote on the resolution. What is required for the Executive to waive the mandatory offer (a whitewash)?
Answer: Approval by independent shareholders at a general meeting, with the concert party and its associates abstaining. A whitewash waiver under the Takeovers Code requires the transaction to be approved by independent shareholders at a general meeting, with the concert party and its associates not voting, together with full disclosure in a circular.
7. During an offer period, the board of the offeree company proposes to issue new shares to a friendly investor to dilute the offeror. Under Rule 4 of the Takeovers Code, the board:
Answer: Must not do so without the approval of shareholders in general meeting. Rule 4 prohibits the offeree board from taking any action during an offer period that may effectively result in the offer being frustrated, such as issuing shares or disposing of significant assets, without prior shareholder approval.
8. Under the Takeovers Code, a general offer must remain open for acceptance for at least:
Answer: 21 days after the offer document is posted. Rule 15.1 requires an offer to remain open for at least 21 days after the offer document is posted, so shareholders have enough time and information to decide.
9. Before an offer document for a cash offer is issued, the financial adviser to the offeror must:
Answer: Confirm in writing that the offeror has sufficient financial resources to implement the offer in full. Under Rule 8.4 of the Takeovers Code, the offeror's financial adviser must confirm in writing that the offeror has resources sufficient to satisfy the offer in full if it is accepted in cash by all offerees.
10. In a takeover, an independent financial adviser (IFA) is normally appointed by:
Answer: The board of the offeree company, to advise shareholders whether the offer is fair and reasonable. Rule 2.1 requires the offeree board to obtain competent independent advice on the offer. The independent financial adviser's advice on whether the offer is fair and reasonable is set out in the offeree board's circular to shareholders.
11. During an offer period, dealings in the relevant securities of the offeree company by the offeror, the offeree company and their associates:
Answer: Must be publicly disclosed under Rule 22 of the Takeovers Code. Rule 22 requires prompt public disclosure of dealings in relevant securities by the offeror, the offeree company, their associates and concert parties during an offer period, so that the market stays informed.
12. An offeror agrees to pay one large shareholder of the offeree company an extra cash payment that is not offered to other shareholders. Under Rule 25 of the Takeovers Code, this special deal:
Answer: Requires the approval of independent shareholders, with the benefiting shareholder and its associates not voting. Rule 25 permits a special deal only if the benefit is extended to all shareholders or approved by independent shareholders, with the persons receiving the benefit and their associates abstaining from voting.
13. A listed company buys back its own shares on the stock exchange under a mandate obtained from shareholders in general meeting. This is:
Answer: An on-market buy-back governed mainly by the Listing Rules, with no offer document. On-market buy-backs are executed on the exchange under a shareholders' mandate and are governed mainly by the HKEX Listing Rules; the general offer regime of the Share Buy-backs Code does not apply.
14. A listed company buys back shares, and as a result a director's holding rises from 29% to 31% of the voting rights. Under Rule 32 of the Takeovers Code, this increase:
Answer: Is treated as an acquisition of voting rights for the purposes of Rule 26. Rule 32 treats an increase in a shareholder's percentage of voting rights caused by a share buy-back as an acquisition for Rule 26, so it can trigger a mandatory offer unless a waiver is obtained.
15. After a takeover, the Panel finds that an offeror seriously breached the Takeovers Code and directs that market participants should not deal with the offeror for a specified period. This sanction is known as:
Answer: A cold shoulder order. The Panel may publicly censure a person and impose a cold shoulder order, directing that market participants should not deal with the person for a specified period. The SFC may also take licensing or disciplinary action.

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Certification guide

Which HKSI papers do you need?: To become an SFC licensed representative (or a relevant individual at a bank), you usually pass three HKSI Licensing Examination papers: Paper 1 on regulation, Paper 7 on financial markets, and one paper for your regulated activity. Here's which one.

Paper 17 exam FAQ

How many questions are on the Paper 17 exam?

40 multiple-choice questions, with a time limit of 60 minutes. Format: closed book, computer-based.

What is the passing score for Paper 17?

70%.

How much does the Paper 17 exam cost?

HK$2,000 in Hong Kong (HK$2,450 at overseas Prometric centres). Fees change, so confirm with the HKSI Institute before you enrol.

Which languages is the Paper 17 exam offered in?

English or Traditional Chinese.

Where do I take the Paper 17 exam?

HKSI Institute computer-based test centre in Hong Kong, or Prometric centres outside Hong Kong.

Is this Paper 17 practice test free?

Yes. The 15-question practice test on this page is free, with an explanation for every answer and no signup. A free account also unlocks the complete study notes for the first topic. The full Paper 17 prep is Premium at HK$1,147 a month for this exam.

What's in the premium Paper 17 prep?

3,000 practice questions organized topic by topic (General Framework: 375; Scope and Application of the Codes: 375; Takeover Structures: 375; Offeror and Offeree Obligations: 375; Obligations of Financial Advisers: 375; Dealings and Special Deals: 375; Share Buy-backs: 375; Case Studies and Enforcement: 375), 6 full-length timed mock exams of 50 questions, 800 flashcards and 60 comprehensive key notes split across all 8 topics, plus a mistakes bank and the Readiness Score.

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Exam details are summarized from the official candidate information available in October 2026. HKSI Institute changes formats and fees, so confirm with Hong Kong Securities and Investment Institute (HKSI Institute) before you book. HKSIMock is not affiliated with the HKSI Institute or the SFC.

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