LE Paper 1 in Apr 2005
The pass rate of Paper 1 held on 23 Apr 2005 was 56%.
Figures 1 and 2 show the distribution by scores of the
exam results and the overall topical correctness
achieved in the examination.
Figure 1. Exam results distribution for
Paper 1 - Apr 2005 Figure
2. Topical correctness for Paper 1 - Apr 2005
¹
The score system of topical correctness provides a
performance score for each topic, ranging from 0 to 1.
When all questions relating to the same topic are
answered correctly by all candidates, the topical
correctness score will be 1. Conversely, if all
questions relating to the same topic are answered
incorrectly by all candidates, the topical correctness
score will be 0.
As shown in Figure 2, candidates' performance, when
compared with the previous month, improved across almost
all topics, with only a slight decline in Topic 1
(Regulatory Overview of the Hong Kong Financial
Industry). In particular, there were marked increases in
the correctness rates of Topic 5 (Business Conduct and
Client Relations), Topic 6 (Business Operations and
Practices) and Topic 7 (Securities, Options and
Futures). Topic 6 is, on average, the topic with the
highest correctness rate in 2005, while Topic 7 remains,
as in 2004, the topic with the lowest average
correctness rate.
A more detailed analysis of the exam results shows
that candidates performed well in a number of subject
areas:
• Philosophy of
regulation in the Hong Kong financial industry;
• Management, Supervision and
Internal Control Guidelines; and
• Money laundering and terrorist
financing.
Candidates are performing unsatisfactorily in the
following subject areas:
• Features of
different forms of share capital;
• Subsidiary legislation made under
the SFO;
• Participants of the exchanges and
clearing houses; and
• Market making in traded options on
the SEHK.
Candidates are recommended to carefully review
section 2 of Topic 2, section 7 of Topic 3 and sections
2 and 3 of Topic 7 which cover these subject areas.
LE Paper 2 in Apr 2005
The pass rate of LE Paper 2
held on 23 Apr 2005 was 51%, a noticeable improvement
from the previous month. Figures 3 and 4 show the
distribution by scores of the exam results and the
overall topical correctness achieved in the examination.
Figure 3. Exam results distribution for Paper 2 - Apr
2005 Figure
4. Topical correctness for Paper 2 - Apr 2005
As shown in Figure 4, candidates' performance in
Topic 5 (Other Securities Activities) saw a significant
improvement this month, rising from 0.39 in Mar 2005 to
0.69 in Apr 2005. The correctness rate of Topic 7
(Market Misconduct and Offences) also increased
considerably but, conversely, that of Topic 2 (Relevant
Statutory and Related Requirements) declined by about
the same margin. Candidates' performance in Topic 6
(Options and OTC Derivatives) continues to show an
upward trend measured over the last 3 months.
Well Performed and Poorly Performed Subjects
Our analysis indicates that candidates performed very
well in a number of subject areas:
• Risk disclosure
statements in client contracts; and
• Licensing requirements for internet
activities.
Candidates are performing unsatisfactorily in the
following subject areas:
• Appointment of
investigators under the Companies Ordinance; and
• Securities and Futures (Client
Securities) Rules.
Candidates should revise carefully section 3 of Topic 1
and section 2 of Topic 2 which cover these subject
areas.
LE Paper 6 in Apr 2005
The pass rate of LE Paper 6
held on 16 Apr 2005 was 47%. Figures 5 and 6 show the
distribution by scores of the exam results and the
overall topical correctness achieved in the examination.
Figure 5. Exam results distribution for
Paper 6 - Apr 2005 Figure
6. Topical correctness for Paper 6 - Apr 2005
As shown in Figure 6, when compared with the
correctness rates of the previous month, candidates'
performance in all 6 topics remains very consistent.
Based on the correctness rates of the 3 most recent
examinations, candidates' performance in both Topic 3
(Regulation of Intermediaries: Licensing and Subsidiary
Legislation) and Topic 5 (Regulation of Intermediaries:
Business Operations and Practices) show an upward trend.
Well Performed and Poorly Performed Subjects
Our analysis indicates that candidates performed very
well in a number of subject areas:
• General
knowledge of MPF products;
• SFC's role in regulating MPF
products; and
• Securities and Futures (Client
Money) Rules.
Candidates are performing unsatisfactorily in the
following subject areas:
• Fundamental
concepts relating to rules and codes issued by the SFC;
• Requirements for advertisements of
authorized CIS; and
• Circumstances for applying the Code
of Conduct to an asset manager.
Candidates are recommended to review carefully
section 4 of Topic 1, section 2 of Topic 2 and section 3
of Topic 4 which cover these subject areas.
Breaches of Examination Regulations
Recently, there have been a number of cases in which
candidates have started to work on their examination
papers before being instructed by the Chief Invigilator
to do so (for example, opening their question booklets
and reading the examination questions, making rough
notes on the question booklets or answering questions on
the answer sheet), or have continued to write after
being told by the Chief Invigilator to stop writing at
the end of the examinations (including marking new
answers or correcting existing answers on the answer
sheet). Candidates are reminded that both of these are
serious offences which can result in their
disqualification from their examinations. Candidates are
expected to pay close attention to the announcements of
the Chief Invigilator throughout their examinations and
regardless of whether their examinations start or finish
later than originally scheduled. Last minute alterations
to questions are undertaken at candidates' own risk.
The HKSI enforces the examination regulations
rigorously and exemptions from penalties for breaches of
these regulations will only be granted under exceptional
circumstances. We would urge all candidates to read the
examination regulations set out in the LE
Examination Handbook carefully prior to taking their
examinations and, if in any doubt as to the meaning of
the regulations, to contact the HKSI office for
clarification.
