Online Access Free NISM-Series-VII Exam Questions

A stock broker executes multiple trades for a client throughout the day in various securities. According to the clearing process regarding the balancing of client accounts within the broker's firm, how is the final obligation handled?

• A.Every trade is settled gross with the clearing corporation, and netting is strictly prohibited within the broker's books.
• B.At the end of the day, the position of each client is netted against all his transactions and the final pay-in/pay-out is carried out.
• C.The broker must segregate buy and sell transactions and settle them separately without offsetting.
• D.Netting is allowed only for institutional clients, while retail client accounts must be settled on a trade-to-trade basis.
• E.Client accounts are balanced weekly to determine the net obligation for the settlement cycle.

A registered Trading Member desires to clear and settle trades executed by them on their own account as well as for their clients. However, they specifically do not intend to clear trades for 'Custodial Participants'. Which category of membership on the Clearing Corporation corresponds strictly to these operational rights and limitations?

• A.Professional Clearing Member (PCM)
• B.Custodian
• C.Trading Member-cum-Clearing Member (TCM)
• D.Authorized Person
• E.Trading cum Self-Clearing Member (SCM)

SEBI introduced Chapter IVA in the SEBI (Stock Brokers) Regulations, 1992, to mandate an 'Institutional Mechanism for Prevention and Detection of Fraud or Market Abuse'. Which of the following is NOT explicitly listed as a required component of this mechanism?

• A.Obligations of the stock-broker and its employees
• B.Escalation and reporting mechanisms
• C.Mandatory rotation of the Principal Officer every 3 years
• D.Whistle Blower Policy
• E.Systems for surveillance of trading activities and internal controls

When a corporate action adjustment (such as a bonus ratio of 3:7) results in fractions, a specific methodology is adopted to minimize fraction settlements. How are the Strike Price and Market Lot rounded off in this process?

• A.Strike Price: Nearest tick size; Market Lot: Nearest integer
• B.Strike Price: Exact value up to 2 decimal places; Market Lot: Exact value
• C.Strike Price: Rounded down to nearest tick; Market Lot: Rounded up to nearest integer
• D.Strike Price: Nearest integer; Market Lot: Nearest tick size
• E.Strike Price: Rounded up to nearest integer; Market Lot: Rounded down to nearest 100

Under the framework for 'Segregation and Monitoring of Collateral at Client Level', when the Clearing Corporation (CC) receives a trade from a client account, what is the specific sequential order in which the margin is blocked if the primary source is insufficient?

• A.Client Collateral -> CM Proprietary Collateral -> TM Proprietary Collateral
• B.Client Collateral Excess Collateral of other Clients CM Proprietary Collateral
• C.Client Collateral -> TM Proprietary Collateral -> CM Proprietary Collateral
• D.CM Proprietary Collateral TM Proprietary Collateral -> Client Collateral
• E.TM Proprietary Collateral -> Client Collateral -> CM Proprietary Collateral