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In retail banks, customers can undertake a wide variety of financial transactions, ranging from deposits, foreign currency conversion, credit cards, remittances and loans, to the purchase of investment or insurance products, and bespoke wealth management solutions. You may call them universal banks as they operate like supermarkets providing one-stop financial service.
Their broad and segmented business oversees a large number of individual depositors, borrowers and investors. Customer-facing operations and multi-channel (e.g. branch network, phone and mobile banking) distribution are key frontline areas. To enhance customer experience, expertise in product development in middle- and back- office must come in.
Lending activity, as one of the primary businesses in retail banks, is sensitive to local economic conditions. Unsecured lending (e.g. credit card and personal loan) continues to be a stable revenue driver; whereas secured lending (e.g. mortgage business) highly depends on the property market outlook and the banks’ own offer.
Non-interest income, i.e. fees and commission, is an important revenue centre. Retail banks offer different types of products ranging from simple investment products (such as equities, unit trusts, insurance, gold etc.) to the more complicated structured products and wealth management services. As one of the key distribution players of unit trusts and insurance products, banks work closely with different stakeholders (e.g. asset management firms and insurance companies) to meet customers’ needs and to optimize costs.
1. Activities regulated by SFC
The Securities and Futures Commission (SFC) is responsible for regulating practitioners who carry out 10 types of dealing and advising activities in Hong Kong. It sets licensing standards to ensure the practitioners are fit and proper. Some of the regulated activities are:
Type 1: Dealing in Securities
Type 2: Dealing in Futures Contracts
Type 3: Leveraged Foreign Exchange Trading
Type 4: Advising on Securities
Type 5: Advising on Futures Contracts
Type 9: Asset Management
To become a licensed representative, a person accredited to a licensed corporation and carries out regulated activities for the licensed corporation has to sit for the Licensing Examination (LE) for securities and futures intermediaries. Representatives are required to pass a set of LE papers in respect of the types of regulated activities participating.
In general, if you have a degree in Accounting, Business Administration, Economics, Finance or Law, or have passed any two of these courses when completing another degree, you would be exempted from the LE. However, you may still be required to take the local regulatory framework paper (Paper 1).
To enroll in the examinations, you may contact Hong Kong Securities and Investment Institute for more information (except Type 3). Institute of Professional Education and Knowledge (of the Vocational Training Council) is responsible for Type 3, i.e. leveraged foreign exchange trading licensing examinations.
2. Insurance Intermediaries Qualifying Examination (IIQE)
Frontline representatives participating in insurance product distribution need to take IIQE. IIQE consists of 5 papers, whereas Paper I (Principles and Practice of Insurance) is compulsory and the others are required according to the type of business the candidate is going to participate in. The type of business can be general insurance, long term insurance or composite insurance.
|Paper I||Principles and Practice of Insurance (P&P)|
|Paper II||General Insurance (GI)|
|Paper III||Long Term Insurance (LT)|
|Paper V||Investment-linked Long Term Insurance (IL)|
|Paper VI||Travel Insurance Agents Examination (TIA)|
Remark: Paper IV (MPF Schemes) ceased to be part of the IIQE since 2013.
3. MPF Intermediaries Examination
To become MPF intermediaries, candidates are required to pass a qualifying examination as part of the registration requirements. The MPF Schemes Examination (conducted by the Vocational Training Council) and the MPF Intermediaries Examination (conducted by the Hong Kong Securities and Investment Institute) are the qualifying examinations specified by MPFA.
Both examinations are based on the same syllabus and cover the following areas: regulatory framework, key features of the MPF system, functions of trustees, MPF schemes and investments, interface arrangements between ORSO schemes and the MPF System and regulation of intermediaries.
The Securities and Futures Commission (SFC):
Mandatory Provident Fund Schemes Authority (MPFA):
Hong Kong Securities and Investment Institute (HKSI):
Vocational Training Council (VTC) – PEAK Exam Centre: