The following updates are examinable from 1 December 2020
TOPIC 1 – OVERVIEW OF THE ASSET MANAGEMENT INDUSTRY
- Material added relating to Private Banking Customers, Wealth Management Connect and Credit Rating Agencies
Private Banking Customers
- The Hong Kong Monetary Authority has defined Private Banking Customer, to cater for the operational needs of private wealth management institutions, as a customer with either at least USD1 million of assets under management with an Authorised Financial Institution (AFI) or total investable assets of at least USD3 million
Wealth Management Connect
- Wealth Management Connect was launched in June 2020 – residents in Hong Kong, Macau and nine Guangdong cities can carry out cross-border investment in wealth management products distributed by banks in the Greater Bay Area (GBA)
Credit Rating Agencies (CRAs)
- Assign credit ratings to issuers of debt and also individual debt issues, based on their ability to repay their debt obligations
- Ratings serve as a preliminary screen but do not replace the responsibility of an asset manager to conduct its own credit analysis
- Major CRAs include Moody’s Investor Services, Standard and Poor’s and Fitch Ratings
TOPIC 2 – CLIENT OBJECTIVES AND THE PRODUCTS AVAILABLE
- Dates and data updated
TOPIC 3 – BASIC THEORETICAL ASPECTS OF PORTFOLIO MNAGEMENT
- Material added relating to the Security Market Line
Security Market Line
- If an investor estimates a stock’s expected return as higher than the required rate of return estimated using CAPM (ie above the SML), then the stock is undervalued and should be bought
- If it lies below the SML, then the stock is overvalued and should be sold short
TOPIC 4 – THE INVESTMENT MANAGEMENT PROCESS
- Dates and data updated
