Examination Results Statistics for LE Papers 1, 2 and 6 in Jan 2007

LE Paper 1 in Jan 2007

The pass rate of LE Paper 1 held on 28 Jan 2007 was 47%. Figures 1 and 2 show the distribution by scores of the exam results and the overall topical correctness¹ achieved in the examination.

 
             Figure 1. Exam results distribution for LE Paper 1 - Jan 2007                           Figure 2. Topical correctness for LE Paper 1 - Jan 2007

Table 1 below shows a comparison of the topical correctness rates of each topic of LE Paper 1 in the December 2006 and January 2007 exams.

	Topic
Month	1	2	3	4	5	6	7	8	9
Dec-06	0.77	0.74	0.70	0.65	0.72	0.72	0.60	0.58	0.74
Jan-07	0.71	0.61	0.72	0.68	0.60	0.78	0.62	0.65	0.75
Table 1. Topical correctness rates for LE Paper 1: Dec 2006 / Jan 2007

Candidates' performance in the January 2007 examination remained consistent when compared with the previous month, with the exception of Topic 2 (Principles of relevant Hong Kong Law and the Companies Ordinance) and Topic 5 (Business Conduct and Client Relations), both of which saw a decline in their correctness rate of over 10 per cent.

Table 2 lists three subject areas in Topics 2 and 5 in which candidates performed unsatisfactorily and indicates the topics/sections in the Study Manual which candidates should read when revising for these subject areas.

Unsatisfactory subject areas		Recommended topics/sections
		Topic	Section
1	Liquidation of companies under the Companies Ordinance	2	2
2	Additional requirements specified in the Code of Conduct	5	2
3	The Corporate Finance Adviser Code of Conduct	5	4
Table 2. Unsatisfactory subject areas for LE Paper 1 - Jan 2007

Revision notes on unsatisfactory subject areas
Candidates are required to know:
1) by whom the liquidator is appointed in a compulsory liquidation or in a creditors' voluntary winding up.
2) that there are additional schedules in the Code of Conduct which specify the requirements for 4 types of regulated activities.
3) the requirements of the CFA Code in relation to making an inducement in connection with client business.

LE Paper 2 in Jan 2007

The pass rate of LE Paper 2 held on 28 Jan 2007 was 43%. 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 LE Paper 2 - Jan 2007                           Figure 4. Topical correctness for LE Paper 2 - Jan 2007

Table 3 below shows a comparison of the topical correctness rates of each topic of LE Paper 2 in the December 2006 and January 2007 exams.

	Topic
Month	1	2	3	4	5	6	7
Dec-06	0.57	0.59	0.79	0.67	0.62	0.57	0.72
Jan-07	0.46	0.65	0.81	0.75	0.67	0.75	0.47
Table 3. Topical correctness rates for LE Paper 2: Dec 2006 / Jan 2007

The correctness rates of the seven topics of LE Paper 2 in the January 2007 examination show a high degree of volatility. While there was a notable improvement in the correctness rate of Topic 6 (Options and OTC Derivatives), there were equally notable declines in the correctness rates of Topic 7 (Market Misconduct and Offences) and, to a lesser extent, Topic 1 (Regulatory Framework).

Table 4 lists four subject areas in the two weakest topics in the January 2007 examination, i.e. Topics 1 and 7, to which candidates are advised to pay particular attention when revising for this examination.

Unsatisfactory subject areas		Recommended topics/sections
		Topic	Section
1	Protection of minority shareholders under the Companies Ordinance	1	3
2	Committees, tribunals and panels in relation to the SFC	1	4
3	Licensing Regime	1	6 and 7
4	False trading	7	2
Table 4. Unsatisfactory subject areas for LE Paper 2 - Jan 2007

Revision notes on unsatisfactory subject areas
Candidates are required:
1) to know the circumstances for applying safeguards to protect minority shareholders' interests.
2) to be able to identify which committees, tribunals and/or panels are independent of the SFC.
3) to know that there are specific conditions for conducting additional regulated activities, i.e. whether an additional licence is
     required.
4) to know the nature of transactions relating to false trading.

LE Paper 6 in Jan 2007

The pass rate of LE Paper 6 held on 13 Jan 2007 was 35%. 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 LE Paper 6 - Jan 2007                           Figure 6. Topical correctness for LE Paper 6 - Jan 2007

Table 5 below shows a comparison of the topical correctness rates of each topic of LE Paper 6 in the December 2006 and January 2007 exams.

	Topic
Month	1	2	3	4	5	6
Dec-06	0.64	0.81	0.59	0.61	0.63	0.66
Jan-07	0.65	0.68	0.54	0.71	0.65	0.74
Table 5. Topical correctness rates for LE Paper 6: Dec 2006 / Jan 2007

Although Topic 4 (Regulation of Intermediaries: Business Conduct and Client Relations) showed a marked improvement in its correctness rate in the January 2007 examination, the correctness rate of Topic 2 (Regulation of Investment Products), the topic with the highest average correctness rate in this examination in 2006 (0.72), recorded a sharp fall.

Table 6 highlights one subject area in Topic 3 in which candidates performed unsatisfactorily, and indicates the section in the Study Manual which candidates should read when revising for this subject area.

Unsatisfactory subject area		Recommended topic/section
		Topic	Section
1	Securities and Futures (Client Securities) Rules	3	7
Table 6. Unsatisfactory subject area for LE Paper 6 - Jan 2007

Revision notes on unsatisfactory subject area
Candidates are required to know the circumstances in which the Client Securities Rules apply.

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.