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NISM NISM-Series-VII Exam Syllabus Topics:

SectionObjectives
Trade Life Cycle- Steps and participants involved in the trade life cycle
  • 1. Role of the back office in a securities broking firm
  • 2. Clearing and settlement process
Indian Securities Market- Overview of the Indian securities market
  • 1. Various market participants and their roles
  • 2. Different products traded
Securities Broking Operations- Front Office, Middle Office and Back Office functions in a Securities Broking Firm
  • 1. Risk management
  • 2. Settlement processing
  • 3. Trade execution
Investor Grievance Redressal- Process of investor grievances redressal
  • 1. Regulatory requirements
  • 2. Procedures for handling complaints
Regulatory Framework- Role of the Securities and Exchange Board of India (SEBI)
  • 1. Regulatory oversight
  • 2. Investor protection
Risk Management- Risk management in a securities broking firm
  • 1. Compliance and control measures
  • 2. Identifying and mitigating risks

NISM Series VII - Securities Operations and Risk Management Certification Sample Questions:

Which of the following items are mandated contributions by the Stock Exchange to the Investor Protection Fund (IPF) according to SEBI guidelines? (Select all that apply)

  • A. At least 20% of the listing fees received.
  • B. 100% of the interest earned on the 1% security deposit kept by issuer companies (immediately on refund).
  • C. Penalties collected from listed companies for non-compliance with LODR Regulations.
  • D. 1% of the listing fees received, on a quarterly basis.
  • E. Penalty collected from Trading Members for deficiency in modification of client code.
Reveal Solution  Discussion  0

Correct Answer: B,C,D,E  🗳️

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If a selling broker fails to deliver securities, the Clearing Corporation conducts an auction. If this auction remains unresolved because there are no sellers (Auction Fail), the transaction is subject to a 'Close out'. How is the close-out price calculated to compensate the buyer in such a scenario?

  • A. At the highest price recorded on the exchange on the trade day only, irrespective of subsequent price movements.
  • B. At the average weighted trade price of the security during the last 5 trading sessions plus brokerage and statutory levies.
  • C. At the standard valuation price determined by the Clearing Corporation on the T+1 pay-in day.
  • D. At the closing price of the securities on the auction day plus a fixed penalty of 5%.
  • E. At the highest price prevailing across the exchange from the day of trading up to the auction day OR 20% above the official closing price on the auction day, whichever is higher.
Reveal Solution  Discussion  0

Correct Answer: E  🗳️

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In the context of Back Office Operations, specifically regarding 'Trade Enrichment', which of the following best describes the process that occurs automatically after trade execution to prepare for clearing and settlement?

  • A. The netting of buy and sell positions to determine the final open position for the purpose of margin calculation.
  • B. The splitting of a single institutional order into multiple sub-accounts based on deal sheets provided by the front office.
  • C. The automatic appending of brokerage rates, GST, stamp duty, and Securities Transaction Tax (STT) to the raw trade data.
  • D. The generation of a unique client code (IJCC) and mapping it to the client's PAN before the order is routed to the exchange.
  • E. The manual verification of the 'INST' Custodial Participant code against the clearing member's exposure limits.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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The relationship between a Depository Participant (DP) and a Depository is governed by an agreement. According to the regulatory norms, where is the form of this agreement specified?

  • A. In the Master Circular for Depositories issued by RBI
  • B. In the bye-laws of the Depository
  • C. In the Securities Contracts (Regulation) Rules, 1957
  • D. In the Articles of Association of the Depository Participant
  • E. In the SEBI (Stock Brokers) Regulations, 1992
Reveal Solution  Discussion  0

Correct Answer: B  🗳️

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Regarding 'Two-factor authentication' for login sessions in Internet Based Trading (IBT), which of the following implementation details is explicitly advisable/required?

  • A. Two-factor authentication is optional and can be replaced by a static high-complexity password.
  • B. The second factor must always be biometric verification.
  • C. Public Key Infrastructure (PKI) based implementation using digital signatures is advisable, and the two factors should not be the same.
  • D. The two factors should be identical (e.g., two different passwords).
  • E. It should be implemented using only SMS-based OTP without any other factor.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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