Hong Kong puts financial professionals to the test
A decade after licensing exams were introduced for the Hong Kong securities industry, even veterans of the sector are going back to class
Turn the clock back a few decades and the criterion for anyone entering the securities industry was to have an uncle or other relative working at a brokerage firm.
But those days are long gone. Today, even holders of doctoral degrees or experienced brokers and senior investment bankers from overseas cannot work in the sector before first passing the Hong Kong Securities and Investment Institute's licensing exam for securities and futures intermediaries.
Since the new licensing regime was introduced in 2003, 400,0000 people have sat the exams in the hope of qualifying to work as securities brokers, futures traders, corporate financial advisers and investment advisers. Hong Kong law requires all applicants to pass two general papers - one on the basic regulatory framework and the other on general product and market knowledge - before they can apply for a licence from the Securities and Futures Commission. Senior executives applying for a responsible officer licence also need to complete a specific regulatory paper.
Attendance for the exams goes up and down in line with the Hang Seng Index. Institute chairman Anthony Muh Yi-tong expected that only about 30,000 people would enrol for the licensing examination this year, on par with the past two years and down from the peak of more than 67,500 in 2008 after the Hang Seng Index hit a record high in late 2007. The institute came into being 15 years ago thanks to some seed funding from the SFC. It started out as the Hong Kong Securities Institute and was rebranded in September.
Muh said the rebranding reflected the broader nature of the institute. "The HKSI has been very successful in providing examinations and training for the financial sector over the past 15 years. By having a name that includes the investment sector, this is very timely and appropriate," he said.
The institute came into being just a few years after the commission. Muh said the stock market crash in 1987 brought in financial market reform and led to the establishment of the SFC in 1989 to ensure proper regulation of the market. The SFC recognised the importance of training for local financial professionals and helped facilitate the setting up of the institute.