Free NISM-Series-VII Questions for NISM NISM-Series-VII Exam

Question #1

Indian Depository Receipts (IDRs) allow foreign companies to raise funds from the Indian securities markets. Which of the following statements accurately reflects the rules regarding the redemption or conversion of IDRs into underlying equity shares?

A. Two-way fungibility is strictly prohibited for IDRs.

B. Redemption is permitted only after 3 years from the date of listing.

C. Redemption/Conversion is permitted after 1 year from the date of listing of the IDRs.

D. IDRs can only be converted into underlying shares if the issuer is a US-based company.

E. Redemption is permitted immediately upon listing of the IDRs.

Discussion 0

Correct Answer: C Vote an answer

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Question #2

Which of the following statements accurately reflect the regulatory framework and exposure limits for Margin Trading Facility (MTF)?
(Select all that apply)

A. Collateral and Funded stocks need not be marked to market daily if they are Group 1 securities.

B. Stock brokers must obtain prior permission from the exchange before offering MTF.

C. Exposure to any single client at any point of time shall not exceed 20% of the broker's maximum allowable exposure.

D. Stock brokers shall disclose gross exposure towards MTF to the Stock Exchanges on or before 6:00 PM on T+1 day.

E. Only corporate brokers with a net worth of at least Rs. 3 crore are eligible to provide MTF.

Discussion 0

Correct Answer: B,D,E Vote an answer

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Question #3

Under Section 12 of the Prevention of Money Laundering Act (PMLA), 2002, what is the mandatory retention period for documents evidencing the identity of clients and beneficial owners?

A. Five years from the date of the specific transaction.

B. Seven years from the date of the suspicious transaction report filing.

C. Ten years from the date of account opening.

D. Two years from the date of the last transaction in the account.

E. Five years after the business relationship between a client and the reporting entity has ended or the account has been closed, whichever is later.

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Correct Answer: E Vote an answer

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Question #4

To ensure compliance with Margin Trading Facility (MTF) regulations, stock brokers are required to submit a certificate to the exchange.
What is the frequency and timeline for this submission?

A. Half-yearly; within one month from the half-year ending 31st March and 30th September.

B. Quarterly; within 15 days from the end of the quarter.

C. Event-based; within 7 days of exceeding the exposure limits.

D. Annually; along with the Annual Returns by October 31st.

E. Monthly; by the 7th of the succeeding month.

Discussion 0

Correct Answer: A Vote an answer

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Question #5

In the context of the clearing and settlement process within the depository system, SEBI vide its circular dated June 05, 2024, mandated a significant change regarding the pay-out of securities. Which of the following statements accurately describes this revised mechanism?

A. Securities for pay-out must be credited to the Clearing Member's Pool Account, who then has 24 hours to transfer them to the client.

B. The timing of the payout of securities remains 1 PM despite the direct credit mechanism.

C. The direct pay-out mechanism is mandatory for all clients, including those having arrangements with SEBI registered custodians.

D. Securities are held in a temporary 'Transit Account' by the Depository until the client issues a Receipt Instruction.

E. Securities for pay-out shall be credited directly to the respective client's demat account by the Clearing Corporations.

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Correct Answer: E Vote an answer

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Question #6

A Trading Member appointed as a syndicate member participates in the book building process for an IPO. Regarding the lifecycle and management of offers (bids) entered into the Stock Exchange system, which of the following statements accurately describes the operational parameters?

A. Offers placed in the system are automatically purged at the end of each trading session if not confirmed by the Registrar.

B. Offers are batched and uploaded at the end of the day, receiving a collective time stamp for the batch.

C. Trading Members can modify or cancel all offers placed in the system from the start till the last day of the book-building process.

D. Once entered and numbered, offers cannot be modified by the Trading Member; they must be cancelled and re-entered.

E. The system accepts offers only during the pre-open session of the Exchange on the issue open days.

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Correct Answer: C Vote an answer

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Question #7

Select the correct combination of statements regarding the expiry cycle and settlement of Long Dated Index Options and Equity Index Futures in the Indian Securities Market.

A. Statement I: Index Futures expire on the last Friday of the month. Statement II: Long dated options follow only a monthly expiry cycle.

B. Statement I: Index Futures are physically settled. Statement II: Long dated options have a 3-year expiry cycle.

C. Statement I: Index Futures are cash settled. Statement II: Long dated options have a maximum expiry of 12 months.

D. Statement I: All Index Futures are cash settled. Statement II: Long dated options are available up to a 5-year expiry cycle with quarterly and half-yearly expiries.

E. Statement I: All Index Futures are physically settled. Statement II: Long dated options expire on the first Thursday of the quarter.

Discussion 0

Correct Answer: D Vote an answer

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Question #8

While the Securities and Exchange Board of India (SEBI) is the primary regulator for the securities market, certain powers under the Securities Contracts (Regulation) Act (SCRA) are exercised concurrently by the Reserve Bank of India (RBI). For which of the following instrument types is this concurrent jurisdiction explicitly applicable?

A. Commodity Derivatives

B. Infrastructure Investment Trusts (InvITs)

C. Equity Derivatives settled physically

D. Ready forward contracts in debt securities

E. Real Estate Investment Trusts (REITs)

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Correct Answer: D Vote an answer

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Question #9

Which of the following statements correctly reflect the general responsibilities and investment restrictions imposed on a Portfolio Manager by SEBI? (Select all that apply)

A. The discretionary portfolio manager can deploy client funds in bill discounting if authorized by the client.

B. Portfolio Managers may invest in units of Mutual Funds only through the direct plan.

C. The portfolio manager shall segregate each client's holding in securities in separate accounts.

D. The portfolio manager shall not borrow funds or securities on behalf of the client.

E. The portfolio manager is permitted to lend securities held on behalf of clients to third parties to generate extra income without restriction.

Discussion 0

Correct Answer: B,C,D Vote an answer

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Free NISM-Series-VII Questions for NISM Series VII - Securities Operations and Risk Management Certification NISM-Series-VII Exam as PDF & Practice Test Engine

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