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

1. According to the provisions regarding 'Settlement dues', if a clearing member fails to discharge their funds obligations at the notified time, which of the following liabilities or actions may they face? (Select all that apply)

A) Immediate forfeiture of the member's personal assets
B) Automatic transfer of the member's clearing bank account to the Investor Protection Fund
C) Withdrawal of trading facility
D) Disciplinary actions
E) Actions as decided by the Relevant Authority

2. The Securities Contracts (Regulation) Act, 1956 (SCRA) and the SEBI Act, 1992 have distinct regulatory scopes. Which of the following regulatory functions falls specifically under the direct jurisdiction of the Central Government as per the SCRA, 1956?

A) Regulation of Portfolio Managers
B) Prohibition of Insider Trading
C) Registration of Venture Capital Funds
D) Recognition and continued supervision of Stock Exchanges
E) Registration of Foreign Portfolio Investors

3. According to the SEBI (Prohibition of Insider Trading) Regulations, 2015, certain categories of persons are 'deemed to be connected persons' unless the contrary is established. Which of the following entities fall under this 'deemed' category?

A) A holding company or subsidiary company of the listed entity.
B) An official of a stock exchange or clearing corporation.
C) A banker of the company.
D) A concern, firm, or HUF wherein a director of the company has more than 10% of the holding of interest.
E) A person who has been associated with the company in any capacity 8 months prior to the trade.

4. If a client submits a transfer instruction where the quantity is *less* than the net delivery obligation provided by the Clearing Corporation, what is the outcome of the validation process by the Depositories?

A) The instruction is held in abeyance until a supplementary instruction for the balance quantity is received.
B) The instruction is carried out by the depositories.
C) The instruction is rejected because it does not fully meet the obligation.
D) The instruction is routed to the Clearing Member for manual approval before processing.
E) The instruction is processed, but a penalty is automatically levied on the client for short delivery.

5. 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 shall follow a strict time schedule to ensure that the settlements are completed on the same day.
B) They must operate with reduced staff to minimize coordination errors.
C) They must implement a separate risk management framework for holiday settlements.
D) They must extend the settlement cycle to T+2 temporarily.
E) They must seek prior approval from SEBI for every individual settlement run.

Solutions: