Paper 9: Derivatives

What this paper covers

This is a Practical Paper — what the SFC calls a Recognised Industry Qualification (RIQ). It tests industry knowledge, product structure and day-to-day practice.

Questions	40 multiple-choice
Time	60 minutes
Pass mark	70%
Delivery	Computer-based (CBE), in English or Traditional Chinese

Syllabus areas

• Types of derivatives: futures, forwards, swaps, options
• Uses of derivative products: hedging, asset switching, profit
• Participants: hedgers, speculators, arbitrageurs
• Forwards: features and forward rate agreements
• Swaps: features and credit default swaps
• Options: features, markets, pay-off, strategies, pricing models
• Option strategies: straddles, strangles, spreads, with underlying assets
• OTC equity derivatives: equity-linked debt investments, equity swaps, OTC options and warrants

A summary of the main areas. Chapter structure and question weighting follow the latest HKSI Institute study material.

Who needs this paper?

Licensed representatives for these regulated activities must pass it:

• Type 2: Dealing in futures contracts (Recognised Industry Qualification)
• Type 5: Advising on futures contracts (Recognised Industry Qualification)
• Type 11: Dealing in / advising on OTC derivatives (Recognised Industry Qualification) — pending commencement of the new regime

Full RA mapping and exemption rules: the complete SFC LE guide.

How to study for it

Practical papers test process and scenario judgement, so memorising statute gets you only so far. Map each product or process onto a timeline — who does what, when, and owing what duty — then use practice questions to check you can locate the role and obligation quickly under time pressure.

At 40 questions in 60 minutes you have roughly 90 seconds per question — practise under timed conditions.