NISM NISM-Series-VII Exam Syllabus Topics:

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

Question 1

According to the SEBI (International Financial Services Centres) Guidelines, 2015, which of the following criteria must a 'Person resident in India' satisfy to deal in securities listed in the IFSC?

A. They must invest only through a Foreign Portfolio Investor (FPI) registered in the IFSC.
B. They must be a High Net-worth Individual (HNI) with a minimum net worth of INR 5 Crore.
C. They are restricted to investing solely in Debt Securities issued by eligible issuers.
D. They are eligible under FEMA to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme (LRS).
E. They must represent a corporate body incorporated in India with a minimum turnover of INR 100 Crore.

Question 2

A clearing member fails to discharge their funds obligations at the notified time. According to the NISM workbook, this failure renders the member liable for specific consequences regarding their operations. Which of the following is explicitly mentioned as a potential liability/action?

A. Withdrawal of trading facility.
B. Suspension of the clearing bank's license.
C. Automatic cancellation of the certificate of registration by SEBI.
D. Immediate transfer of the clearing member's proprietary trades to the Investor Protection Fund.
E. Mandatory liquidation of all client assets held in the pool account.

Question 3

Apart from the primary clearing account, a Clearing Member is permitted to maintain an 'additional clearing account' with a designated clearing bank. For what specific operational purposes is this additional account utilized?

A. For collecting brokerage and statutory levies from clients.
B. For separating proprietary trading funds from client funds.
C. For the purpose of enhancement of collateral in the form of cash and providing early pay-in of funds.
D. For receiving dividend payments from listed companies on behalf of clients.
E. For settlement of commodities derivatives trades only.

Question 4

SEBI has introduced the mechanism of Net Settlement of cash segment and F&O segment upon expiry of stock derivatives. Under which of the following conditions is this benefit of netting (merged settlements) specifically available to an investor?

A. When the investor uses different Clearing Members for Cash and F&O segments but they are interoperable.
B. When the investor is a Portfolio Manager (PMS) directed to enter into delivery backed transactions only.
C. When the investor trades and clears through the same Trading Member (TM) - Clearing Member (CM) combination in both Cash and F&O segments.
D. When the investor is an Institutional Investor (including FPIs) whose transactions are backed by delivery.
E. When the investor trades in highly correlated indices across different exchanges.

Question 5

A transferee (buyer) in the depository system wishes to receive securities into their demat account. What is the operational requirement regarding 'Standing Instructions' (SI) for this process?

A. Standing Instructions allow the DP to debit the account without a Delivery Instruction Slip (DIS).
B. Standing Instructions are mandatory for all accounts; without them, the account remains inactive.
C. Standing Instructions are valid only for off-market transfers and not for market trades.
D. The SI functionality has been replaced entirely by the Demat Debit and Pledge Instruction (DDPI).
E. If 'Standing Instructions' are not given, the transferee must give separate Receipt Instructions each time to the DP to receive securities.

Solutions: