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NISM NISM-Series-VII Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Trading Operations | 15% | - Client onboarding and KYC norms - Front office functions and processes - Order management and trade execution |
| Topic 2: Risk Management and Margining | 18% | - Types of risks in securities operations - Risk monitoring and control measures - Margining systems and methodologies |
| Topic 3: Clearing and Settlement | 15% | - Delivery versus payment and settlement guarantee - Clearing process and roles of clearing corporations - Settlement cycle and mechanisms |
| Topic 4: Securities Market Overview | 10% | - Market participants and their roles - Structure and segments of Indian securities market - Types of securities and products |
| Topic 5: Regulatory Framework | 15% | - Code of conduct and ethical practices - Compliance requirements for intermediaries - SEBI Act, Rules and Regulations |
| Topic 6: Technology in Securities Markets | 8% | - Data security and business continuity - Systems for trading, clearing and settlement - Emerging technologies and their impact |
| Topic 7: Investor Protection | 7% | - Investor education and awareness initiatives - Mechanisms for dispute resolution - Investor rights and grievances redressal |
| Topic 8: Market Microstructure | 12% | - Trading mechanisms and order types - Price discovery and market efficiency - Market indices and their calculation |
NISM Series VII - Securities Operations and Risk Management Certification Sample Questions:
A financial services firm applies for registration as a Portfolio Manager. They nominate Mr. X as the Principal Officer. Mr. X holds a professional qualification in finance from a recognized university. Regarding his experience, which of the following conditions MUST he satisfy to meet the eligibility criteria?
- A. Experience of at least 2 years in related activities in the securities market if he holds a CFA charter.
- B. Experience of at least 3 years in related activities in the securities market, with at least 1 year in portfolio management.
- C. Experience of at least 7 years in related activities in the securities market, with no specific requirement for portfolio management experience.
- D. Experience of at least 5 years strictly as a stock broker or dealer in the equity derivatives segment.
- E. Experience of at least 5 years in related activities in the securities market, including at least 2 years in portfolio management or investment advisory services or fund management.
Correct Answer: E 🗳️
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Which of the following statements accurately describes the currency and jurisdictional nature of an International Financial Services Centre (IFSC) in India?
- A. It caters to domestic customers only, offering products in foreign currency.
- B. It is a deemed domestic territory for FEMA purposes but deals in foreign currency.
- C. It is a jurisdiction providing financial services to non-residents and residents (to the extent permissible) in a currency other than the domestic currency (Indian Rupee).
- D. It operates under the jurisdiction of the state government where it is located, dealing in dual currencies.
- E. It operates in Indian Rupee (INR) but is exempt from RBI regulations.
Correct Answer: C 🗳️
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While institutional trades generally do not attract upfront margins, specific categories of institutional investors are subject to upfront margining similar to non-institutional trades. Identify the category from the list below.
- A. Category II FPIs who are corporate bodies, individuals, or family offices
- B. Mutual Funds registered with SEBI
- C. Category I Foreign Portfolio Investors (Sovereign Wealth Funds)
- D. Insurance Companies registered with IRDAI
- E. Public Financial Institutions defined under the Companies Act
Correct Answer: A 🗳️
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According to the SEBI guidelines on Trade Annulment, what is the specific application fee structure that Stock Exchanges must charge for accepting an annulment request from a stock broker?
- A. There is no fee for trade annulment if the request is submitted within 30 minutes.
- B. 5% of the value of trade(s), subject to a minimum of? 1 lakh and maximum of ? 10 lakhs.
- C. A fixed fee of? 1 lakh irrespective of trade value, credited to the Investor Service Fund.
- D. 2% of the value of trade(s), with no minimum or maximum cap, credited to the Core Settlement Guarantee Fund.
- E. 1% of the value of trade(s), subject to a minimum of ? 50,000 and maximum of ? 5 lakhs.
Correct Answer: B 🗳️
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To safeguard client funds during the running account settlement process, SEBI has stipulated specific banking procedures. Which of the following statements correctly describes the requirement regarding the 'Up Streaming Client Nodal Bank Account' (USCNBA) during settlement?
- A. Trading Members must ensure that funds received from clients whose running account has been settled remain in the USCNBA and are not used to settle other clients.
- B. The USCNBA is used only for receiving funds from the Exchange, while client receipts are deposited in the Settlement Account.
- C. Funds can be moved to the broker's proprietary account temporarily to facilitate faster settlement payouts.
- D. Funds in the USCNBA can be used for inter-client adjustments if the clients have provided specific consent in the KYC form.
- E. USCNBA funds must be transferred to the Clearing Corporation's settlement account before being paid out to clients.
Correct Answer: A 🗳️
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