In 2026, the evaluation test of professional competence of securities practitioners was nearing, and many candidates were caught up in the cycle of “reading books and making mistakes”. This is an in-depth rehearsing of the issues of the year, drawing up 20 gold-backed knowledge points for you and helping you to improve your points。
Definition of securities
Security is the sum of all types of property symbols and, in law, a legal document which is recorded and represents a certain right. It is not only a documentary document but represents more the holder's right to claim a particular asset or interest. The understanding of the legal characteristics of securities in the securities practice examination is the first step towards entry into the capital market. It has fundamental features such as legal, written, specific, growth and mobility。
Ii. The nature of equities
The shares are certificates issued by the limited company certifying the shareholders'shares. Its core nature includes: equities as market securities, key securities, securities as certificates, capital securities and portfolio securities. Candidates need to pay particular attention to the fact that the stock itself is of no value and represents shareholder ownership of the company. This ownership is a comprehensive right, including participation in general meetings of shareholders, voting, participation in the red-reduced。
Iii. The bond element
The core elements of bonds, as evidence of claims, include their nominal value, bond prices, paper interest rates and repayment periods. The paper interest rate on bonds is influenced by a variety of factors, including bank interest rates, financiers ' creditworthiness and bond duration. At the time of review, the negative correlation between bond prices and market interest rates, which is common knowledge in financial markets, and the high-frequency test point of calculation and logical judgement, is to be clarified。
Iv. Functioning of the fund
Portfolio investment funds are a pool of risk-sharing and benefit-sharing investments. Its operations involve three core subjects: administrators, trustees and holders. The custodian is normally a qualified commercial bank responsible for the custody of assets, which separates investment from custody. Such a mechanism, which effectively reduces moral hazard, is the institutional basis on which public fund-raising funds can be spread among public investors。
V. Derivative instruments
Financial derivatives are financial contracts in which the value depends on changes in the price of the underlying asset. Forwards, futures, options and swaps are common. The main functions of derivatives are risk management, price discovery, speculation and arbitrage. In the examination, the application of different tools in risk hedges is often examined, with the understanding that their “leveraging” and “high-risk” are the core logic of the answer。
Market participants
Participants in the securities market include issuers, investors, intermediaries, self-regulatory organizations and regulators. Of these, issuers are mainly companies, governments and financial institutions. As candidates, the boundaries of the responsibilities of the different participants must be distinguished. For example, securities firms act as intermediaries providing services such as underwriting, brokering and asset management, while securities associations are self-regulatory organizations and non-administrative regulators。
Vii. Functions of the sec
The csrc, as a direct organ of the state council, exercises centralized and unified control over the national securities futures market. Its core duties include the establishment of regulatory rules, the approval of administrative permits and the detection and prosecution of violations. The central objective of regulation is to protect the legitimate interests of investors and to maintain a fair, just and open market order. An understanding of the administrative nature of the regulatory body will facilitate the analysis of administrative penalties in the laws and regulations。
Viii. Functions of the association
The china securities industry association is a self-regulatory organization in the securities industry and a legal entity of public associations. Its functions focus on the development of industry self-regulation rules, qualification management of practitioners, organization of industry training, etc. Self-regulation is an effective complement to administrative regulation. Examinations often identify which matters fall under “regulatory responsibility” and which fall under “self-regulatory functions”, and candidates need to establish clear comparative tables。
Ix. Transaction rules
Securities transactions follow the principle of “price preference, time priority”. When the price is declared to be the same, the first to file the transaction takes precedence; when the time of filing is the same, the purchase price is higher than the purchase price and the sale price is lower than the selling price. This is the underlying logic of secondary market transactions. In addition, there is a need for special regulations on rise and fall limits, transaction schedules and large transactions, details of which often lie in the trap of choice。
X. Financing corrections
A financing voucher business is a business where securities firms lend money to customers to buy or sell securities. This is a credit transaction with leverage. Investors are required to meet appropriate regulatory requirements, such as equity assets, trading experience and so forth, in opening the business. The review should focus on the ratio of the bond, the scope of the subject matter of the securities and the situation of forced silos, understanding their double-edged effect on market liquidity。
Xi. Registration core
The full implementation of the stock issuance registration system is a major reform of the current capital market. At its core is a centrepiece of information disclosure, which is reviewed by an exchange and registered by the cvm. Under the registration system, the conditions for issuance are more inclusive and the vetting process more transparent and predictable. Candidates need to understand the nature of the differences between registration and approval systems, particularly changes in issuance pricing, vetting processes and legal liability。
Xii. Sustainable sale
The securities are mainly undersold by way of representation and underwriting. The sale is then divided into full and balance. In the settlement of balances, the underwriter undertakes to purchase all unsold securities at the end of the period. This tested the risk tolerance and pricing levels of securities firms. Understanding the differences in risk assumed by issuers and underwriters under different underwriting modes is key to mastering the issuance system。
Risk management
The risk management of securities firms usually emphasizes “three lines of defence”: self-control by the business sector, professional audit by the risk management department and oversight inspection by the audit department. The types of risk include mainly market risk, credit risk, liquidity risk and operational risk. At the time of the examination, a case-by-case analysis is to be made, for example, where the default is a credit risk, while the system failure is an operational risk。
Xiv. Ethics
Codes of professional ethics for securities practitioners include honesty, due diligence, integrity and self-regulation, and the compliance industry. Rejection of commercial bribery and failure to engage in insider trading are moral grounds and legal red lines. In examinations, ethics-type topics usually appear in the context of situational analysis, requiring candidates to judge whether practitioners are acting in compliance, which is relatively easy to obtain and should not be lost。
15, insider trading
An insider is an insider who uses insider information to trade in securities or advise others to do so. The definition of insider information usually includes undisclosed information relating to the operation of the company, its finances or materially affecting the price of the securities. A tough blow to insider trading is intended to preserve market fairness. Candidates need to be familiar with the individuals who are in the knowledge and specific areas of insider information, which are the most affected areas under the law。
Xvi. Market manipulation
Market manipulation includes continuous trading manipulation, contractual trading manipulation, and laundering manipulation. The essence is to mislead other investors by artificially interfering with securities prices or trade volumes. The manipulation of the market is not only a matter of civil liability, but also of criminal penalties for serious crimes. In interpreting these acts, the subjective element of “intention to affect the price of securities” is to be captured。
Investor protection
The proper management of investors requires that “the right product be sold to the right investor”. Securities firms need to classify investors according to their risk tolerance and to rate their products. When disputes arise, ordinary investors enjoy special protection, such as reversal of the burden of proof. This knowledge point reflects the bias of the capital market towards the systems of vulnerable groups and has been a hot spot for examinations in recent years。
Credit ratings
Credit ratings are an assessment of the debtor's ability to fulfil its obligations as contracted. Rating results are usually expressed in symbols such as aaa, aa, etc. Credit ratings are an important reference for bond market pricing. Candidates need to understand the access systems, business processes and dynamic adjustment mechanisms for rating results of credit rating agencies and the important role of ratings in reducing information asymmetries。
Connectivity
Interconnection mechanisms, including deep harbours and quilunt, are important initiatives for the opening of our capital markets in both directions. Through this mechanism, domestic and external investors can invest across markets. This has not only increased market mobility, but also contributed to the targeting of internal and external regulatory regimes. Basic rules such as the management of investment levels, the choice of currency for transactions and the settlement system should be in place。
Xx. Financial science and technology
Financial science and technology (fintech) is increasingly used in the securities industry, such as smart investment, block chain clearing, big data winding, etc. The application of science and technology has increased industry efficiency, but has also brought new challenges such as modelling risks and algorithm discrimination. At the beginning of the examination, cutting-edge points, such as digital transformation, cyber security regulation and so forth, require candidates to have an age perspective。
These 20 knowledge points, which cover the core skeleton of the securities industry examination, suggest that, in the course of the review, a macro-view be established by reading teaching materials, followed by targeted raids in conjunction with these dry sites. The travaux préparatoires are not a blind sketch, but a precise memory of the legal bottom lines and market rules based on an understanding of logic。
It is recommended that a “14 days of sprinting” be developed: the first seven days to identify gaps against these 20 knowledge points, and the following seven days to conduct a full-fledged simulation exercise to maintain a sense of the problem. As long as the basis is solid and the mindset is stable, passing the examination is not difficult。
Which do you think is the hardest thing to remember? Or what kind of pits were encountered in preparation? Welcome to the comment section. Let's get out of here
# take that knowledge #
