Overview
Based on monthly average pass rates reported for the year-to-date, the most challenging papers continue to be Papers 1 (Fundamentals of Securities and Futures Regulation: 52.2%) and 9 (Derivatives: 47.2%), however Paper 6 (Regulation of Asset Management) is becoming trickier to pass.
The Paper 1 pass rate rose above 50% in both August (52.8%) and September (52.4%), having been below 50% for the previous two months, while the Paper 6 pass rate for August fell to 51% – the lowest pass rate for many years. The pass rates for Paper 2 were below 66% for both August and September, while the pass rate for Paper 3 hit a historic high of 96% in August. The pass rates for Paper 5 were both above 85%.
The pass rates for the practical papers in August and September mostly revolved around the year-to-date averages:
HKSI Paper | August | Year-to-date Average | September |
| 7 | 61.4% | 63.9% | 63.3% |
| 8 | 63.0% | 62.0% | 61.6% |
| 9 | 50.0% | 47.2% | 62.1% |
| 12 | 75.8% | 65.3% | 67.4% |
Let’s have a look at some of the individual papers.
Paper 1 – Fundamentals of Securities and Futures Regulation
| Average monthly pass rate | 52.2% |
| Standard deviation of monthly averages | 2.9% |
| Range of monthly pass rates | 48.5% to 58.5% |
All figures year-to-date
The range of monthly pass rates has widened compared to 2018 (49.4% to 55.4%) with the monthly mean pass rate dropping slightly. The general trend in the Paper 1 pass rate in 2019 had been downwards until August and September, when the rates moved above 52%. In recent months, the pass rate appears to vary between 48% and 52%. Paper 1 cannot be taken for granted.
Paper 2 – Regulation of Securities
| Average monthly pass rate | 68.8% |
| Standard deviation of monthly averages | 4.0% |
| Range of monthly pass rates | 62.7% to 74.7% |
All figures year-to-date
While the Paper 2 monthly pass rate has hovered around 70% for the past few years, both August and September rates were well below this average (Aug: 65.8%; Sept 62.7%). Indeed, the September pass rate is the lowest for many years. Are the Paper 2 questions becoming harder?
Paper 3 – Regulation of Derivatives
| Average monthly pass rate | 83.3% |
| Standard deviation of monthly averages | 9.9% |
| Range of monthly pass rates | 65.6% to 96.9% |
All figures year-to-date
Paper 3 is notable for the wide range of monthly pass rates (over 30%), which reflects a small sample rather than exam difficulty. The Paper 3 occurs once a month.
Paper 5 – Regulation of Corporate Finance
| Average monthly pass rate | 75.1% |
| Standard deviation of monthly averages | 9.5% |
| Range of monthly pass rates | 59.5% to 88.2% |
All figures year-to-date
The Paper 5 2019 monthly average pass rate appears steady compared to 2018, although there continues to be great variability in the pass rates with a standard deviation of 9.5% and a range of almost 30%. As the exam is only run once a month, small sample sizes give rise to high variability in average scores.
Paper 6 – Regulation of Asset Management
| Average monthly pass rate | 65.6% |
| Standard deviation of monthly averages | 11.9% |
| Range of monthly pass rates | 50.7% to 81.2% |
All figures year-to-date
Although the Paper 6 average monthly pass rate for the year-to-date is just shy of 66%, this masks the most recent pass rates for June and July of just over 54% and August of 51%. However, September’s rate bounced back to 58.2%. Candidates have noted that these are the lowest Paper 6 pass rates for a number of years. Are the Paper 6 exams becoming more difficult? It appears that the Paper 6 examiner is taking a tougher line.
Paper 7 – Financial Markets
| Average monthly pass rate | 63.9% |
| Standard deviation of monthly averages | 2.9% |
| Range of monthly pass rates | 60.8% to 67.8% |
All figures year-to-date
All Paper 7 average monthly pass rates have exceeded 60% in 2019 to date, which has not been the case for a number of years. The range and standard deviation of the monthly averages reflect large sample sizes, as the exam is run eight times per month.
Paper 8 – Securities
| Average monthly pass rate | 62.0% |
| Standard deviation of monthly averages | 5.6% |
| Range of monthly pass rates | 52.2% to 69.0% |
All figures year-to-date
Paper 8, which is often taken in conjunction with Paper 7, has a wider range, higher standard deviation and lower pass rate than Paper 7. As with Paper 7, it is run eight times per month, which suggests that candidates find Paper 8 marginally more difficult than Paper 7.
Paper 9 – Derivatives
| Average monthly pass rate | 47.2% |
| Standard deviation of monthly averages | 10.9% |
| Range of monthly pass rates | 29.4% to 62.1% |
All figures year-to-date
Paper 9 has always been the most difficult SFC licensing exam to pass, and 2019 is no exception, although September’s pass rate of 62.1% is the highest of the year so far. The average monthly pass rate has not exceeded 50% for a number of years and it may be similar for 2019. May’s average pass rate was 29.4% – dispiriting for many a Paper 9 candidate.
Paper 12 – Asset Management
| Average monthly pass rate | 65.3% |
| Standard deviation of monthly averages | 9.0% |
| Range of monthly pass rates | 52.3% to 75.8% |
All figures year-to-date
Paper 12 is run twice a month, giving a relatively small sample size, which goes some way to explain the wide range of monthly pass rates and the relatively high standard deviation of 9.0%. It is worth noting that the monthly average pass rate of this technical paper has not dipped below 50% so far in 2019, unlike 2018.
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