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

1. In the context of handling settlements during holidays, specific provisions are made regarding the utilization of assets received from a prior settlement. How is the pay-out from the first settlement treated in relation to subsequent obligations?

A) It is locked in the member's pool account for 24 hours to prevent misuse.
B) It is automatically converted into liquid assets and pledged to the Core Settlement Guarantee Fund.
C) The cash or securities pay out from the first settlement shall be made available to the member for meeting his pay-in obligations for the subsequent settlement(s).
D) It is returned to the Clearing Corporation to cover potential shortfalls in the subsequent settlement's auction.
E) It must be transferred to the client's beneficiary account immediately and cannot be used for subsequent proprietary obligations.

2. In the context of Settlement Dues, the clearing agency pays moneys payable to clearing members and custodians for every settlement. What is the specific basis for determining these payable amounts?

A) The daily margin statement generated by the Clearing Member
B) The contract notes issued by the broker to the client
C) The net worth certificate submitted by the member
D) The bank statement of the Clearing Bank
E) Information provided by the Exchange or Clearing Agency

3. Under the SEBI (Infrastructure Investment Trusts) Regulations, 2014, if an InvlT raises funds via private placement, which of the following combinations of 'minimum investment' and 'trading lot' criteria must be met?

A) Minimum Investment: Rs. 10,000; Trading Lot: Rs. 5 Lakhs
B) Minimum Investment: Rs. 50 Lakhs; Trading Lot: Rs. 10 Lakhs
C) Minimum Investment: Rs. 1 Crore; Trading Lot: Rs. 25 Lakhs
D) Minimum Investment: Rs. 25 Crores; Trading Lot: 1 Unit
E) Minimum Investment: Rs. 10 Lakhs; Trading Lot: 1 Unit

4. Stock brokers are required to report specific transactions to the Financial Intelligence Unit - India (FIU-IND) under the Prevention of Money Laundering Act. Which of the following combinations correctly specifies the submission timelines for the Cash Transaction Report (CTR), Suspicious Transaction Report (STR), and Non-Profit Organization Transaction Report (NTR)?

A) CTR: By 7th of succeeding month; STR: Within 3 days of conclusion; NTR: By 7th of succeeding month.
B) CTR: By 15th of succeeding month; STR: Within 7 days of arriving at a conclusion; NTR: By 15th of succeeding month.
C) CTR: By end of the quarter; STR: Within 15 days of conclusion; NTR: By end of the quarter.
D) CTR: By 1 5th of succeeding month; STR: Within 24 hours of conclusion; NTR: By 30th of succeeding month.
E) CTR: By 10th of succeeding month; STR: Within 7 days of occurrence; NTR: By 10th of succeeding month.

5. Regarding the maintenance and preservation of books of account and other records by stock brokers, which of the following statements accurately reflects the regulatory requirements under the Securities Contracts (Regulation) Rules, 1957 (SCRR) and SEBI Regulations?

A) Books must be maintained in physical form only for a minimum of 5 years; electronic records are optional.
B) Books must be preserved for 8 years in alignment with the Companies Act, regardless of SEBI regulations.
C) Books must be preserved for 10 years if the broker is involved in algorithmic trading.
D) Books must be preserved for 3 years; seized originals need not be tracked once handed over to agencies.
E) Books must be preserved for 5 years; if originals are seized by an enforcement agency, they must be preserved (originals or copies) until the trial is completed.

Solutions: