Paper 5 Exam Study Guide (2026)
Everything the HKSI LE Paper 5: Regulation of Corporate Finance 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 5 study notes for “Regulatory Structure and Code of Conduct”
Our first full set of comprehensive notes, about 10 minutes of reading: The legal framework · Who regulates what · Part XV disclosure of interests · Corporate governance · The Corporate Finance Adviser Code of Conduct · The Hong Kong equity capital market, 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. Regulatory Structure and Code of Conduct
The laws, regulators and conduct rules behind Hong Kong corporate finance activity.
Key facts
- The Securities and Futures Ordinance (Cap. 571) is the main statute: licensing, market misconduct and Part XV disclosure of interests.
- The SFC regulates intermediaries and administers the Takeovers and Share Buy-back Codes through the Executive (the head of its Corporate Finance Division).
- The SEHK, under HKEX, is the front-line regulator of listing; the Listing Rules are contractually binding on issuers.
- The Companies Ordinance (Cap. 622) governs share capital and company law duties; prospectuses fall under the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the Securities and Futures (Stock Market Listing) Rules.
- The Corporate Finance Adviser Code of Conduct requires honesty, fairness, due skill, care and diligence, and acting in clients' best interests and the interests of market integrity.
- The Corporate Governance Code in the Listing Rules works on a comply-or-explain basis, with mandatory board requirements such as independent non-executive directors.
Flashcards
Exam tip: Know which regulator does what: the SFC for intermediaries and takeovers, the SEHK for listing.
2. Listing on the SEHK
How companies list on the Main Board and GEM, and the obligations that follow.
Key facts
- The Main Board and GEM have different entry tests based on profit, market capitalisation, revenue and cash flow.
- The Listing Division processes applications, the Listing Committee approves or rejects them, and the Listing Review Committee reviews Listing Committee decisions.
- At least one sponsor must be appointed at least 2 months before the listing application is submitted, to conduct due diligence; at least one overall coordinator is required for an IPO.
- A compliance adviser is appointed from listing until the first full financial year's results are published, to advise on Listing Rules compliance.
- Continuing obligations include timely disclosure of inside information, connected transaction rules, the public float requirement and corporate governance reporting.
- SEHK disciplinary powers include private reprimand, public statement of criticism, public censure, director unsuitability statement, and suspension or cancellation of listing.
- A Main Board company suspended for 18 months (GEM: 12 months) may have its listing cancelled.
Flashcards
Exam tip: Match each party (sponsor, overall coordinator, compliance adviser) to its stage of the listing life cycle.
3. Takeovers, Mergers and Share Buy-backs
The Codes on Takeovers and Mergers and Share Buy-backs: triggers, offers and buy-backs.
Key facts
- The Codes are non-statutory and administered by the Executive; the Takeovers and Mergers Panel resolves disputes and the Takeovers Appeal Committee hears appeals.
- The ten General Principles require all shareholders to be treated fairly and equally.
- Mandatory offer triggers: acquiring 30% or more of the voting rights, or the 2% creeper for a holder of 30% to 50% acquiring more than 2% in any 12-month period.
- A mandatory offer must be in cash or carry a cash alternative at not less than the highest price the offeror paid in the previous 6 months.
- Frustrating actions under Rule 4: during an offer period the board cannot issue shares or dispose of material assets without shareholder approval in general meeting.
- The Executive may waive the mandatory offer (whitewash) where independent shareholders approve, advised by an independent board committee and an independent financial adviser.
- Off-market buy-backs need the Executive's approval and at least 75% of votes cast by disinterested shareholders; on-market buy-backs can run under a general mandate under the Listing Rules.
Flashcards
Exam tip: Learn the 30% and 2% triggers cold; they anchor most scenario questions.
Test yourself on these topics
Take the free 15-question Paper 5 test, then save your results to unlock your Readiness Score and the mistakes bank.
4. Convertibles, Rights Issues and Share Schemes
Convertible debt, rights issues and employee share schemes under the Listing Rules.
Key facts
- Convertible debt securities can be listed; conversion by a holder that crosses 30% of voting rights can trigger the Takeovers Code.
- Rights issues are pre-emptive offers to all shareholders pro rata; one that would increase the issued shares by more than 50% needs independent shareholders' approval.
Flashcards
Exam tip: Remember the three numbers: 50% (rights issue size needing independent approval), 20% (general mandate) and 10% (scheme mandate limit).
How to pass
- 40 questions in 60 minutes: that is 90 seconds each, so keep moving.
- The pass mark is 70%, so you need 28 out of 40 correct.
- Learn the Takeovers Code triggers cold: 30% for a mandatory offer and the 2% creeper for holders of 30% to 50%.
- Match each party to its stage: sponsor and overall coordinator before listing, compliance adviser after listing, Listing Committee for approval.
Frequently asked questions
How long should I study for the Paper 5 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 5 exam online?
Yes. Paper 5 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 5 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 regulatory structure and code of conduct, listing on the sehk, takeovers, mergers and share buy-backs, convertibles, rights issues and share schemes. Use the free practice test to see which ones you need most.
The premium Paper 5 study path
Premium Paper 5 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
- 1Regulatory Structure and Code of Conduct15 key notes, 200 flashcards, then 750 practice questions in 30 sets of 25Notes free with an account
- 2Listing on the SEHK15 key notes, 200 flashcards, then 750 practice questions in 30 sets of 25Premium
- 3Takeovers, Mergers and Share Buy-backs15 key notes, 200 flashcards, then 750 practice questions in 30 sets of 25Premium
- 4Convertibles, Rights Issues and Share Schemes15 key notes, 200 flashcards, then 750 practice questions in 30 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).