Paper 17 Exam Study Guide (2026)
Everything the HKSI LE Paper 17: Regulation of Takeovers and Share Buy-backs tests, topic by topic: what each section covers, the facts that come up most, and how to study it. Pair it with the free 15-question practice test.
The exam at a glance
| Questions | 40 multiple-choice questions |
|---|---|
| Time | 60 minutes |
| Passing score | 70% |
| Format | Closed book, computer-based |
| Certifying body | Hong Kong Securities and Investment Institute (HKSI Institute) |
| Test provider | HKSI Institute computer-based test centre in Hong Kong, or Prometric centres outside Hong Kong |
Mind map: the whole exam on one screen
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.
1. General Framework
The legal and regulatory framework for takeovers and share buy-backs in Hong Kong, and who needs a licence to advise on them.
Key facts
- The Takeovers Code and the Share Buy-backs Code are non-statutory codes issued by the SFC and administered by the Executive Director of the Corporate Finance Division (the Executive).
- Their main purpose is fair and equal treatment of shareholders and the maintenance of an orderly market during control transactions.
- Advising on matters under the Codes is Type 6 regulated activity (advising on corporate finance) under the SFO; representatives must meet competence requirements, including this paper.
- Other relevant law: the SFO (market misconduct including insider dealing, disclosure of interests), the Companies Ordinance (schemes of arrangement, compulsory acquisition) and the HKEX Listing Rules.
- The Codes do not have the force of law, but breaches can lead to Panel disciplinary action, public censure, cold shoulder orders and SFC licensing consequences.
- The SFC can license, supervise, investigate and impose disciplinary sanctions on licensed persons who breach the Codes.
Flashcards
Exam tip: Remember the Codes are non-statutory but are enforced through the Panel and the SFC's licensing powers, so 'not law' does not mean 'no consequences'.
2. Scope and Application of the Codes
Which companies and persons the Codes cover, the Ten General Principles, and the roles of the Executive, the Panel and the TAC.
Key facts
- The Codes apply to Hong Kong public companies and to overseas companies with a primary listing on the Stock Exchange of Hong Kong, covering offers for their equity and other relevant securities.
- The Ten General Principles apply to all persons covered by the Codes; the first is that all shareholders must be treated even-handedly.
- The Executive administers the Codes day to day, gives rulings, consents and waivers, and refers disciplinary matters to the Panel.
- The Takeovers and Mergers Panel reviews Executive decisions and hears disciplinary cases; the Takeovers Appeal Committee (TAC) hears appeals from the Panel.
- Panel sanctions include public censure and cold shoulder orders; the SFC may also take licensing and disciplinary action.
- If in doubt about how the Codes apply, a party should consult the Executive.
Flashcards
Exam tip: Draw a simple hierarchy: Executive, then Panel, then TAC. Questions often test which body does what.
3. Takeover Structures
Concert parties, voluntary and mandatory offers, whitewashes, schemes of arrangement, privatisations and the offer timetable.
Key facts
- Persons acting in concert are presumed to be acting together; the Code sets out presumptions covering companies and their directors, fund managers and other related persons.
- A mandatory offer is triggered under Rule 26.1 when a person acquires 30% or more of voting rights, or holds 30% to 50% and acquires more than 2% in any 12-month period (the creeper).
- The mandatory offer price must be at least the highest price paid by the offeror or its concert parties for relevant shares in the previous six months (Rule 26.3).
- A whitewash waiver of the mandatory offer requires approval by independent shareholders, with the concert party and its associates not voting.
- The chain principle can trigger a mandatory offer for a company when control of its parent or a company in the chain is acquired.
- A scheme of arrangement needs court sanction and shareholder approval and, once effective, binds all shareholders, unlike a general offer; privatisation by general offer can be completed by compulsory acquisition once acceptances reach 90% of the disinterested shares.
- Core timetable points: offer document within 21 days of the firm offer announcement, and the offer open at least 21 days after posting.
Flashcards
Exam tip: For any scenario question, first ask whether the stake is below 30%, in the 30% to 50% band, or above 50%. That decides whether Rule 26.1 bites.
Test yourself on these topics
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4. Offeror and Offeree Obligations
What the offeror and the offeree company must do before, during and after an offer period.
Key facts
- Before an offer, the offeror must ensure secrecy and can only approach certain persons; leaks require prompt announcements.
- The offeree board must not take frustrating action during an offer period, such as issuing shares or disposing of significant assets, without shareholder approval (Rule 4).
Flashcards
Exam tip: Rule 4 questions are common: any action by the offeree board that could frustrate the offer needs prior shareholder approval.
5. Obligations of Financial Advisers
What financial advisers must do before accepting an engagement, during the transaction, and the special role of the IFA.
Key facts
- Before accepting an engagement, the financial adviser must consider conflicts of interest, including those arising from its associates, and whether it can act properly.
- The financial adviser must ensure compliance with the Codes, consult and cooperate with the Executive, and keep the transaction confidential.
Flashcards
Exam tip: Two recurring adviser duties: verify the documents and confirm the money. Almost every adviser question touches one of them.
6. Dealings and Special Deals
Dealing restrictions, disclosure of dealings during an offer period, and the rules on special deals and deal protection fees.
Key facts
- During an offer period, the offeror, the offeree company, their associates and concert parties must publicly disclose dealings in relevant securities (Rule 22).
- Dealings by exempt fund managers and exempt proprietary traders may be exempt from Rule 22 disclosure, subject to conditions.
Flashcards
Exam tip: In special deal questions, the answer almost always turns on independent shareholder approval with the benefiting party abstaining.
7. Share Buy-backs
On-market, off-market and exempt share buy-backs and how the Share Buy-backs Code interacts with the Listing Rules.
Key facts
- The Share Buy-backs Code protects shareholders who retain their shares when a company buys back shares from others.
- An off-market buy-back generally requires a general offer to all shareholders, an offer document and compliance with the Code's timetable and disclosure rules.
Flashcards
Exam tip: Sort every buy-back question into on-market, off-market or exempt first; the regulatory treatment follows directly.
8. Case Studies and Enforcement
How the Executive and the Panel deal with breaches, deficient adviser work and common issues under the Codes.
Key facts
- The Panel can publicly censure persons who breach the Codes and impose cold shoulder orders directing market participants not to deal with them.
- Deficient financial adviser work, such as inadequate verification or failure to confirm financial capability, can lead to SFC disciplinary action against the adviser and its staff.
Flashcards
Exam tip: In case study questions, look for the adviser's failure to verify, to consult the Executive or to disclose; these drive most published decisions.
How to pass
- 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.
Frequently asked questions
How long should I study for the Paper 17 exam?
Most working candidates need 4 to 8 weeks at 45 to 60 minutes a day. Book your exam once your Readiness Score has stayed at 80 or higher for about a week.
Can I take the Paper 17 exam online?
Yes. Paper 17 can be taken at the HKSI Institute's computer-based test centre in Hong Kong or, for candidates outside Hong Kong, at a Prometric centre (higher fee). Format: closed book, computer-based. Check the HKSI Institute's current candidate information for the rules.
What score do I need to pass the Paper 17 exam?
70%. The exam has 40 multiple-choice questions and a time limit of 60 minutes.
What are the most tested topics?
The outline covers general framework, scope and application of the codes, takeover structures, offeror and offeree obligations, obligations of financial advisers, dealings and special deals, share buy-backs, case studies and enforcement. Use the free practice test to see which ones you need most.
The premium Paper 17 study path
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.
Your step-by-step study path
- 1General Framework8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Notes free with an account
- 2Scope and Application of the Codes8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- 3Takeover Structures8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- 4Offeror and Offeree Obligations8 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- 5Obligations of Financial Advisers7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- 6Dealings and Special Deals7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- 7Share Buy-backs7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- 8Case Studies and Enforcement7 key notes, 100 flashcards, then 375 practice questions in 15 sets of 25Premium
- Final step: 6 full mock exams50 questions each, timed like test day. Pass them, then book your exam.Premium
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Summarized from the HKSI Institute's official candidate information and the rules cited, checked October 2026. Confirm current requirements with Hong Kong Securities and Investment Institute (HKSI Institute).