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Responsible Officer papers · Last updated October 2026

HKSI LE Paper 3: Regulation of Derivatives: free practice test

The regulation paper for Responsible Officers of Type 2 (dealing in futures contracts) and Type 5 (advising on futures contracts), taken with Papers 1, 7 and 9. It covers the derivatives regulatory framework, licensing, client money and securities, conduct of business, record keeping, HKFE trading and settlement, and OTC derivative reporting and clearing.

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About the Paper 3 exam

The regulation paper for Responsible Officers of Type 2 (dealing in futures contracts) and Type 5 (advising on futures contracts), taken with Papers 1, 7 and 9. It covers the derivatives regulatory framework, licensing, client money and securities, conduct of business, record keeping, HKFE trading and settlement, and OTC derivative reporting and clearing.

What's on the exam

Paper 3
Regulatory Framework
6 key facts
Licensing and Registration
6 key facts
Client Securities and Money
6 key facts
Conduct of Business
6 key facts
Record Keeping and Reporting
5 key facts
Futures Trading and Settlement
6 key facts
OTC Derivatives Trading, Reporting and Clearing
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 3 exam

  • 40 questions in 60 minutes is 90 seconds each; keep moving and come back.
  • 70% means 28 correct out of 40, so you can afford 12 wrong.
  • Learn the HKEX group once: HKFE trades, HKCC clears futures, SEOCH clears stock options, HKSCC settles shares.
  • Types 2 and 5 run through the whole paper: match each rule to dealing in futures versus advising on futures.

Save your results and get your Readiness Score

Create a free account after the test: your score by topic, a mistakes bank, the complete study notes for the first topic, flashcards and the HKSI Key Numbers Sheet.

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What's in the premium Paper 3 prep

Premium Paper 3 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 7 topics

Your step-by-step study path

  1. 1
    Regulatory Framework9 key notes, 115 flashcards, then 450 practice questions in 18 sets of 25
    Notes free with an account
  2. 2
    Licensing and Registration9 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25
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  3. 3
    Client Securities and Money9 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25
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  4. 4
    Conduct of Business9 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25
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  5. 5
    Record Keeping and Reporting8 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25
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  6. 6
    Futures Trading and Settlement8 key notes, 115 flashcards, then 425 practice questions in 17 sets of 25
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  7. 7
    OTC Derivatives Trading, Reporting and Clearing8 key notes, 110 flashcards, then 425 practice questions in 17 sets of 25
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  8. 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 3 study notes for “Regulatory Framework”

Our first full set of comprehensive notes, about 10 minutes of reading: What counts as a derivative · The SFC · The HKEX group · Other regulators and influences · International futures exchanges and clearing houses · Differences when dealing in international futures, 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. Which body is the front-line regulator of the trading rules and conduct of HKFE Participants?
Answer: HKEX, through the HKFE Rules. HKEX supervises its own participants under the HKFE Rules, making it the front-line regulator. The SFC licenses those participants and supervises HKEX as the recognized exchange controller.
2. Under Schedule 5 of the Securities and Futures Ordinance, 'dealing in futures contracts' is:
Answer: Type 2 regulated activity. Schedule 5 of the Securities and Futures Ordinance (Cap. 571) lists dealing in futures contracts as Type 2. Type 5 is advising on futures contracts and Type 1 is dealing in securities.
3. A Hong Kong firm executes a client's order in futures contracts listed on an overseas exchange. Under the SFO this is:
Answer: Dealing in futures contracts, a Type 2 regulated activity. The SFO's definition of futures contract is not limited to contracts traded in Hong Kong. Executing client orders in overseas-listed futures is dealing in futures contracts and needs a Type 2 licence.
4. An individual employed by a licensed corporation who carries on a regulated activity must be:
Answer: A licensed representative accredited to the corporation. Individuals who carry on regulated activities for a licensed corporation must be licensed as representatives and accredited to that corporation. Responsible Officers are the representatives who directly supervise regulated activities; executive officers serve registered institutions.
5. An authorized institution (bank) carries on Type 2 activity in Hong Kong. Its status under the SFO is:
Answer: A registered institution whose day-to-day supervision rests with the HKMA. Authorized institutions carrying on regulated activities are registered institutions under the SFO: registered with the SFC but supervised day to day by the HKMA, whose approval their executive officers need.
6. Under the Client Money Rules, client money received by a licensed corporation must be:
Answer: Paid into designated client accounts at authorized institutions in Hong Kong, separate from the firm's own money. The Client Money Rules made under the SFO require client money to be held on trust and paid into designated client accounts at authorized institutions in Hong Kong, segregated from the firm's own funds.
7. A futures broker wants to use a client's securities to support the firm's own borrowing. Under the Client Securities Rules this is:
Answer: Prohibited except where the rules allow it and the client has consented. The Client Securities Rules allow client securities to be held or used only for the client and for purposes the rules permit with the client's written consent. Using them for the firm's own purposes is a breach and an offence.
8. Before a licensed corporation opens a futures trading account for a retail client, it must:
Answer: Assess the client's financial situation, investment experience and objectives, and have the client sign a client agreement and risk disclosure statement. The Code of Conduct requires know-your-client information covering financial situation, investment experience and investment objectives, and for futures accounts a signed client agreement and risk disclosure statement.
9. A licensed corporation suspects that a client's transaction involves money laundering. It must:
Answer: File a suspicious transaction report with the JFIU and avoid tipping off the client. Suspicious transaction reports go to the Joint Financial Intelligence Unit under the Organized and Serious Crimes Ordinance (s.25A) and related ordinances; the AMLO sets the customer due diligence and record keeping duties. Tipping off the client is an offence.
10. A futures contract note must be despatched to the client:
Answer: Not later than the second business day after the transaction day. The Contract Notes Rules made under the SFO require contract notes for futures transactions to be despatched not later than the end of the second business day following the transaction day.
11. Under the Securities and Futures (Contracts Limits and Reportable Positions) Rules, a person whose futures position reaches the reportable level must:
Answer: Report the position to the exchange as the rules require. The rules set two different things: prescribed limits, which a person must not exceed unless authorised, and reportable positions, which must be reported to the exchange once they reach the reportable level. Holding a reportable position is allowed; failing to report it is an offence.
12. Initial margin on HKFE futures cleared through HKCC is:
Answer: A risk-based deposit set by the clearing house. HKCC, the clearing house for HKFE, sets initial margin using its risk-based margining methodology rather than a fixed percentage. Positions are marked to market daily and variation margin settles gains and losses.
13. Hang Seng Index futures contracts are settled by:
Answer: Cash settlement based on the final settlement price. HKFE index futures such as Hang Seng Index futures are cash settled: at expiry the difference between the traded price and the final settlement price is paid in cash, with no delivery of shares.
14. Under Hong Kong's OTC derivatives reporting regime, specified persons must report specified OTC derivative transactions to:
Answer: The Hong Kong Trade Repository operated by the HKMA. The OTC derivative transaction reporting rules made under the SFO require specified persons, such as licensed corporations and authorized institutions, to report specified transactions to the Hong Kong Trade Repository, which the HKMA operates.
15. A specified OTC derivative transaction between two specified persons that falls within the clearing mandate must be:
Answer: Cleared through a designated clearing house under the OTCD Clearing Rules. The OTCD Clearing Rules require specified transactions between specified persons to be cleared at designated clearing houses. Non-centrally cleared OTC derivatives instead attract margin requirements.

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Paper 3 exam FAQ

How many questions are on the Paper 3 exam?

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

What is the passing score for Paper 3?

70%.

How much does the Paper 3 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 3 exam offered in?

English or Traditional Chinese.

Where do I take the Paper 3 exam?

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

Is this Paper 3 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 3 prep is Premium at HK$1,147 a month for this exam.

What's in the premium Paper 3 prep?

3,000 practice questions organized topic by topic (Regulatory Framework: 450; Licensing and Registration: 425; Client Securities and Money: 425; Conduct of Business: 425; Record Keeping and Reporting: 425; Futures Trading and Settlement: 425; OTC Derivatives Trading, Reporting and Clearing: 425), 6 full-length timed mock exams of 50 questions, 800 flashcards and 60 comprehensive key notes split across all 7 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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