PrepLicense: HK SFC · Study notes · Paper 15
SFC LE Paper 15: Sponsors (Principals)
Paper 15 covers the duties of sponsor principals: sponsor eligibility, planning and supervising due diligence, and internal controls.
1. Sponsor work under Type 6
Sponsors must hold a Type 6 licence and meet the eligibility criteria in the Listing Rules; principals face higher experience requirements.
2. Eligibility of sponsor principals
Know the years of experience, the nature of transactions required, and the rule that each deal must be supervised by a designated principal.
3. Appointment and independence
The timing of appointment, the independence test, and what must be disclosed or managed where the sponsor has an interest in the issuer.
4. Planning due diligence
The principal sets the due diligence plan, defines its scope and depth, and ensures adequate resources and suitable staff to carry it out.
5. Business, financial and legal due diligence
Verification of business model and industry position, examination of financial information and internal controls, and review of legal compliance and material litigation.
6. Reliance on third-party experts
A sponsor may rely on accountants, valuers and other experts, but must assess their qualifications and independence — reliance does not discharge the sponsor's own duty.
7. Record keeping
The due diligence process and conclusions must be documented in auditable form — this is the primary defence when regulators later enquire.
8. Liability and sanctions
Sponsors can face civil and criminal liability for prospectus misstatements, plus disciplinary action from the SFC and SEHK.
Sources and how to use these notes
These notes are organised around the syllabus areas published by HKSI Institute and are conceptual summaries — use them to build a framework and to revise quickly before the exam. For specific provisions, numeric thresholds and question weightings, rely on the latest official HKSI study material and the SFC source texts.
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