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NISM Series VII - Securities Operations and Risk Management Certification Sample Questions (Q209-Q214):
NEW QUESTION # 209
SEBI designates certain stock brokers as 'Qualified Stock Brokers' (QSBs) based on specific parameters to ensure appropriate governance and risk management. Which of the following parameters are explicitly considered for designating a stock broker as a QSB?
(Select all that apply)
- A. The total number of active clients of the stock broker.
- B. The number of sub-broker offices managed by the stock broker.
- C. The net worth of the stock broker's promoter group.
- D. The proprietary trading volumes of the stock broker.
- E. The available total assets of clients with the stock broker.
Answer: A,D,E
Explanation:
The parameters considered for designating a stock broker as a QSB include: (a) the total number of active clients; (b) the available total assets of clients; (c) trading volumes (excluding proprietary); (d) end of day margin obligations; (e) proprietary trading volumes; (f) compliance score; and (g) grievance redressal score. Promoter net worth and number of sub-broker offices are not listed parameters.
NEW QUESTION # 210
Which regulatory framework governs the operationalization of the Bullion Exchange, Bullion Clearing Corporation, Bullion Depository, and Vault Manager within the IFSC?
- A. SEBI (Custodian of Securities) Regulations, 1996
- B. RBI (Gold Monetization Scheme) Directions, 2015
- C. SEBI (Vault Managers) Regulations, 2021
- D. IFSCA (Bullion Exchange) Regulations, 2020
- E. FEMA (Export of Goods and Services) Regulations, 2015
Answer: D
Explanation:
IFSCA (International Financial Services Centres Authority) has issued operating guidelines to enable the Bullion Exchange, Bullion Clearing Corporation, Bullion Depository, and Vault Manager in an IFSC to operationalize these activities as per the IFSCA (Bullion Exchange) Regulations, 2020.
NEW QUESTION # 211
What is the primary operational mandate for Clearing Corporations (CCs) and Depositories to ensure the feasibility of multiple settlements occurring on a single day due to holidays?
- A. They must extend the settlement cycle to T+2 temporarily.
- B. They must seek prior approval from SEBI for every individual settlement run.
- C. They must operate with reduced staff to minimize coordination errors.
- D. They shall follow a strict time schedule to ensure that the settlements are completed on the same day.
- E. They must implement a separate risk management framework for holiday settlements.
Answer: D
Explanation:
The text explicitly states: 'The CCs and depositories shall follow a strict time schedule to ensure that the settlements are completed on the same day.'
NEW QUESTION # 212
A purchaser of securities wishes to streamline the process of receiving securities into their demat account. What are the permissible modes for a client to handle receipt instructions with their Depository Participant (DP)?
- A. The client must mandatorily issue a separate physical receipt instruction for every single trade.
- B. Standing instructions are only valid for government securities and not for equity shares.
- C. Receipt instructions are not required at all as the Clearing Corporation has a unilateral right to credit any account.
- D. The client can give a one-time standing instruction to the DP for receiving securities, or choose to issue separate receipt instructions for each purchase.
- E. The client must grant a Power of Attorney to the Clearing Corporation to auto-credit securities.
Answer: D
Explanation:
A purchaser of securities can give a one-time standing instruction to his DP for receiving securities in his account. This standing instruction can be given at the time of opening of account or later. Alternatively, the client may choose to issue separate receipt instruction to his DP every time the client makes any purchase of securities.
NEW QUESTION # 213
Under the 'Block Mechanism' in demat accounts for sale transactions, what is the specific operational protocol regarding the movement and unblocking of shares if the sale transaction is **not** executed on the trade day (T day)?
- A. Shares are transferred to the Clearing Corporation's settlement pool and returned only after the auction session on T+1 .
- B. Shares are automatically transferred to the Trading Member's pool account and returned to the client on T+1 day.
- C. Shares are debited from the client's account and held in a suspense account by the Depository until the next trading session.
- D. Shares remain blocked until the client explicitly submits a cancellation instruction via the depository participant.
- E. Shares continue to remain in the client's demat account and will be unblocked at the end of the T day.
Answer: E
Explanation:
According to the block mechanism framework, if a sale transaction is not executed, the shares shall continue to remain in the client's demat account and will be unblocked at the end of the T day. This eliminates the movement of shares from the client's demat account for early pay- in and back if the trade is not executed.
NEW QUESTION # 214
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