The following updates are examinable from 1 March 2026
TOPIC 1 – OVERVIEW OF SECURITIES INVESTMENTS
- Material updated relating to Bond Connect:
Bond Connect
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- HKEx introduced the Northbound Trading of Bond Connect in July 2017 allowing investors to buy bonds in the China Interbank-Bond Market (CIBM) via HKEx. CIBM is the 3rd largest market after US and Japan. CIBM includes a small number of RMB bonds issued by foreign entities – known as panda bonds
- Southbound trading began in September 2021, allowing approved Mainland institutions to access bonds tradable in Hong Kong
- The cross-border capital net outflow is subject to a daily quota of RMB20 billion and an aggregate quota of RMB500 billion
- Material added relating to Beijing Stock Exchange:
Beijing Stock Exchange (BSE)
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- Established in September 2021 as a primary platform serving innovation-driven small and medium-sized enterprises that are not able to list on the SSE and SZSE
- Wholly owned by the National Equities Exchange and Quotation (NEEQ)
- Material added relating to international indices:
TOPIX Indices
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- The Tokyo Stock Price Index (TOPIX) covers over 1,000 stocks listed on the Tokyo Stock Exchange
TOPIC 2 – THE STOCK EXCHANGE OF HONG KONG: PRIMARY AND SECONDARY MARKETS
- Material added relating to Additional Listing Regimes in the Main Board:
Additional Listing Regimes in the Main Board
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- Additional listing regimes have been added to the Main Board to keep Hong Kong competitive, including regimes for biotech companies, specialist technology companies and special purpose acquisition companies (SPACS)
- A Biotech Company is a company primarily engaged in using science and technology to research, develop, apply and commercialise products that have a medical or other biological application
- Variations on listing requirements enable pre-revenue Biotech Companies to gain access to the public capital market during their period of development, however they must have a two-year trading record under substantially the same management
- A specialist technology company is a company primarily engaged in research/ development/commercialisation/sales of a product/service that applies science/technology within an acceptable sector of the Specialist Technology Sector
- Material added relating to Uncertified Securities
Electronic Initial Public Offering and Uncertified Securities
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- Hong Kong adopts a fully digitalised and electronic process for public offerings of equity securities to IPO through the Electronic Initial Public Offering (eIPO) services provided by SEHK
- Under the Uncertified Securities Market (USM) regime, scheduled for implementation in 2026, physical securities certificates will no longer be issued for newly listed prescribed securities, where the issuer is incorporated in:
- Hong Kong
- Chinese Mainland
- Bermuda
- Cayman Islends
- Going forward, investors will hold allotted shares in electronic form
- Existing physical securities certificates will be gradually replaced with electronic book-entry securities between 2026 and 2030
TOPIC 3 – PARTICIPANTS IN THE MARKETS
- Material added relating to Securities Registrars:
- Upon implementation of the Uncertified Securities Market initiative, anyone wanting to provide securities registrar services must first be approved by the SFC as an approved securities registrar
- Material added relating to CPAL:
Commodity Pricing and Analysis Limited (CPAL)
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- CPAL is a subsidiary established by HKEX, based in Dubai
- CPAL acts as a commodities pricing administrator providing market analysis and independent price reporting to the global metals market
TOPIC 4 – TYPES OF SECURITIES
- New material relating to security tokens:
SECURITY TOKENS
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- Securities issued as digital asset tokens that are represented on distributed ledgers (eg blockchains)
- They provide investors with an economic stake in a legal entity, which may include rights such as receiving cash flows or other financial assets, voting in company decisions and holding a residual interest in the entity
- Security tokens, including tokenised securities, qualify as “securities” as defined in the SFO. As such, trading of security tokens are subject to SFO regulations
TOPIC 5 – STOCK MARKET ADMINISTRATION
- Stamp duty on stock exchange transactions was lowered to 0.1%
TOPIC 6 –SECURITIES ANALYSIS
- New material relating to metrics on stock selection:
METRICS ON STOCK SELECTION
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- Investors who prefer growth stocks will look to price-earnings-to-growth (PEG):
PEG = P/E ratio / EPS growth x 100
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- PEG < 1: stock may be undervalued
- PEG = 1: stock is fairly valued
- PEG > 1: stock may be overvalued
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- However, PEG may undervalue income-generating stocks, as it ignores dividends. To address this, the price earnings to growth and dividend yield (PEGY) ratio is used:
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PEGY = P/E ratio / (EPS growth + dividend yield) x 100
