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

LE Paper 1 in Mar 2007

The pass rate of LE Paper 1 held on 17 Mar 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 - Mar 2007                           Figure 2. Topical correctness for LE Paper 1 - Mar 2007

Table 1 below shows a comparison of the topical correctness rates of each topic of LE Paper 1 in the first three months of 2007.

	Topic
Month	1	2	3	4	5	6	7	8	9
Jan-07	0.71	0.61	0.72	0.68	0.60	0.78	0.62	0.65	0.75
Feb-07	0.71	0.69	0.73	0.62	0.72	0.70	0.61	0.77	0.76
Mar-07	0.83	0.70	0.72	0.60	0.67	0.63	0.62	0.66	0.76
Average	0.75	0.67	0.72	0.63	0.66	0.70	0.62	0.69	0.76
Table 1. Topical correctness rates for LE Paper 1: Jan - Mar 2007

The correctness rates of most of the nine topics of LE Paper 1 in the March examination remained stable when compared to the previous month. Notable exceptions were the correctness rate of Topic 1 (Regulatory Overview of the Hong Kong Financial Industry), which improved by 12 per cent, and that of Topic 8 (Other SFC Regulated Activities), which dropped by 11 per cent after improving considerably in the previous month.

Table 2 lists one subject area in each of Topics 4, 5 and 6 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	HKMA requirements for staff engaged in regulated activities	4	1
2	Fund Manager Code of Conduct	5	3
3	Automated trading services	6	5
Table 2. Unsatisfactory subject areas for LE Paper 1 - Mar 2007

Revision notes on unsatisfactory subject areas
Candidates are required to know:
1) which SFC guidelines registered institutions are required to comply with, and the requirements for appointing executive officers.
2) the approach that the SFC will take in applying the FMCC.
3) that automated trading services do not include any system in relation to the operations of a recognised exchange or a recognised
    clearing house (i.e. the SEHK, the HKFE and their related clearing houses).

LE Paper 2 in Mar 2007

The pass rate of LE Paper 2 held on 17 Mar 2007 was 22%. 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 - Mar 2007                           Figure 4. Topical correctness for LE Paper 2 - Mar 2007

Table 3 below shows a comparison of the topical correctness rates of each topic of LE Paper 2 in the first three months of 2007.

	Topic
Month	1	2	3	4	5	6	7
Jan-07	0.46	0.65	0.81	0.75	0.67	0.75	0.47
Feb-07	0.48	0.76	0.73	0.65	0.70	0.59	0.52
Mar-07	0.44	0.58	0.69	0.66	0.58	0.71	0.44
Average	0.46	0.66	0.74	0.69	0.65	0.68	0.48
Table 3. Topical correctness rates for LE Paper 2: Jan - Mar 2007

Although the correctness rate of Topic 6 (Options and OTC Derivatives), which had dropped by 16 per cent in the previous month, improved noticeably in the March examination, candidates' performance declined in almost all of the seven topics of LE Paper 2 when compared both to the February examination and to the average correctness rate of each topic in 2007. In particular, the correctness rates of both Topic 2 (Relevant Statutory and Related Requirements) and Topic 5 (Other Securities Activities) recorded substantial declines.

Table 4 lists one subject area in each of Topics 2, 5 and 7 in which candidates performed unsatisfactorily, and indicates the topics/sections in the Study Manual which candidates should read when revising for them.

Unsatisfactory subject areas		Recommended topics/sections
		Topic	Section
1	Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules	2	4
2	Requirements for securities margin financing activities	5	2
3	False trading	7	2
Table 4. Unsatisfactory subject areas for LE Paper 2 - Mar 2007

Candidates are particularly advised to revise carefully subject area 3, "False trading", in which candidates have performed unsatisfactorily for three consecutive months.

Revision notes on unsatisfactory subject areas
Candidates are required to know:
1) the circumstances under which receipts are not required to be issued.
2) that SEHK participants are not allowed to provide securities margin financing for futures and options trading.
3) that off-market transactions are not covered in the provisions of false trading.

LE Paper 6 in Mar 2007

The pass rate of LE Paper 6 held on 11 Mar 2007 was 39%. 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 Mar 2007                           Figure 6. Topical correctness for LE Paper 6 - Mar 2007

Table 5 below shows a comparison of the topical correctness rates of each topic of LE Paper 6 in the first three months of 2007.

	Topic
Month	1	2	3	4	5	6
Jan-07	0.65	0.68	0.54	0.71	0.65	0.74
Feb-07	0.80	0.73	0.64	0.76	0.58	0.64
Mar-07	0.68	0.63	0.59	0.58	0.61	0.80
Average	0.71	0.68	0.59	0.68	0.61	0.72
Table 5. Topical correctness rates for LE Paper 6: Jan - Mar 2007

After a strong performance in February, the performance of LE Paper 6 candidates in the March examination declined again. Although the correctness rate of Topic 6 (Market Misconduct and Compliance Issues) improved significantly by 16 per cent, the correctness rates of Topic 1 (Overview of Legal and Regulatory Structure), Topic 2 (Regulation of Investment Products) and Topic 4 (Regulation of Intermediaries: Business Conduct and Client Relations) dropped sharply.

Table 6 highlights one subject area in each of Topics 3 and 4 in which candidates performed poorly, 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	Licensing of asset management activities	3	1
2	Failure to observe code of conduct	4	1
Table 6. Unsatisfactory subject areas for LE Paper 6 - Mar 2007

Revision notes on unsatisfactory subject areas
Candidates are required to know:
1) the categories of activity that are not deemed to be conducting asset management.
2) whether the code of conduct is admissible as evidence in any proceedings.

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.