NISM-Series-VII Dumps (2026) Prepare Your Exam With 334 Questions
New NISM-Series-VII Dumps - Real NISM Exam Questions
NEW QUESTION # 24
A claim against a defaulter trading member is received by the Stock Exchange after three years from the date of expiry of the specified period for lodging claims. How is such a claim categorized under the IPF guidelines?
- A. It may be dealt with as a civil dispute.
- B. It is referred to the SEBI Complaints Redressal System (SCORES) for arbitration.
- C. It is treated as a priority claim but paid only after all timely claims are settled.
- D. It is eligible for 50% of the compensation limit applicable to timely claims.
- E. It is automatically rejected and cannot be pursued in any forum.
Answer: A
Explanation:
The text states: 'Any claim received after three years from the date of expiry of the specified period may be dealt with as a civil dispute.'
NEW QUESTION # 25
In the context of stock brokers providing mutual fund services, what specific compliance obligation is imposed by Regulation 4(g) of the SEBI (Investment Advisers) Regulations, 2013?
- A. Stock brokers must ensure client level segregation of advisory and distribution activities at the entity and group level.
- B. Stock brokers must route all mutual fund advisory transactions through a separate subsidiary company.
- C. Stock brokers must obtain a separate license from AMFI for providing advisory services.
- D. Stock brokers must maintain a minimum net worth of Rs. 1 Crore to offer investment advice.
- E. Stock brokers are prohibited from charging any commission on mutual fund distribution if they are registered as InvestmentAdvisers.
Answer: A
Explanation:
Regulation 4(g) of SEBI (Investment Advisers) Regulations, 2013 requires stock brokers to comply with general obligations... which, inter-alia, provide that client level segregation of advisory and distribution activities needs to be ensured at the entity and group level.
NEW QUESTION # 26
If an auction seller, who participated to fulfill a short delivery, fails to deliver the securities on the auction pay-in day, the deal is closed out. What is the specific pricing formula used to charge the defaulting auction seller in this instance?
- A. The maximum price of the security recorded during the entire settlement cycle.
- B. Official closing price on the close out day plus the auction premium.
- C. Highest price from trade day to close out day OR 20% over official closing price on the close out day, whichever is higher.
- D. The price at which the auction offer was originally accepted plus a 5% penalty.
- E. Highest price prevailing on the Exchange on the auction day only.
Answer: C
Explanation:
When the auction seller fails to deliver the securities on the auction pay-in day, the deal will be closed out at the highest price prevailing across the Exchange from the day on which the trade was originally executed till the day of closing out or 20 percent over the official closing price on the close out day whichever is higher.
NEW QUESTION # 27
Regarding 'Internal Shortages' within a broker's firm (where a selling client fails to deliver, but the broker has no net obligation to the Clearing Corporation due to an offsetting buy by another client), what is the specific regulatory advice concerning the handling of charges under the 'Direct Pay-out' of securities framework?
- A. Internal shortages must be reported to the Exchange, and the trade should be annulled with mutual consent of both clients.
- B. The broker must buy the shares from the open market on T+2 and can pass on the purchase cost plus a standard brokerage fee to the defaulting client.
- C. The broker should handle such shortages through the process of auction as specified by CCs and is advised not to levy any charges on the client over and above the charges levied by the CCs.
- D. The broker must conduct a private auction among its own clients and can charge a facilitation fee not exceeding 1% of the trade value.
- E. The broker is mandated to close out the internal shortage at the highest price of the settlement cycle plus a 5% penalty credited to the Investor Protection Fund.
Answer: C
Explanation:
To handle shortages arising due to inter se netting of positions between clients with introduction of Direct Pay-out of securities in client account, SEBI has advised TM/CM to handle such shortages through the process of auction as specified by CCs. Further, SEBI advised TMICM in such cases not to levy any charges on the client over and above the charges levied by the CCs.
NEW QUESTION # 28
Select the correct statements regarding the 'Settlement of Funds' and 'Mode of Payment' compliance requirements for stock brokers.
(Select all that apply)
- A. All payments from/to clients must be strictly by account payee crossed cheques/demand drafts or direct credit into the bank account.
- B. For clients with outstanding obligations on the settlement date, the broker may retain the requisite funds towards such obligations.
- C. Brokers must maintain an audit trail of funds received through electronic fund transfers to ensure they are from the client's own account.
- D. Authorization for maintaining a running account can be signed by the client's Power of Attorney (POA) holder.
- E. Brokers are permitted to accept cash from clients for margin purposes up to Rs. 20,000.
Answer: A,B,C
Explanation:
Statement A is incorrect; Brokers should 'not accept cash'. Statement B is correct. Statement C is incorrect; authorization must be signed 'by the client only and not by any... holder of the Power of Attorney'. Statement D is correct. Statement E is correct.
NEW QUESTION # 29
Transfer of securities from one account to another within the depository system may be done for which of the following purposes?
(Select all that apply)
- A. Transfer arising out of a transaction done on a recognized Stock Exchange.
- B. Transfer due to an 'off-market' transaction (person-to-person).
- C. Transfer arising out of account closure.
- D. Transfer for the purpose of evading Stamp Duty.
- E. Transfer arising out of transmission of securities.
Answer: A,B,C,E
Explanation:
Transfer of securities from one account to another may be done for any of the following purposes: a. Transfer due to a transaction done on a person-to-person basis i.e. 'off-market' transaction. b. Transfer arising out of a transaction done on a recognised Stock Exchange. c. Transfer arising out of transmission of securities and account closure.
NEW QUESTION # 30
A Trading Member (TM) has the following positions in a specific stock futures contract at the end of a trading day:
Proprietary Account: Buy 2000, Sell 1500
Client A: Buy 1000, Sell 1200
Client B: Buy 500, Sell 100
Based on the methodology for determining the open positions of clearing members in the derivatives segment, what is the TM's 'Open Position' for this contract?
- A. 500 contracts (Net Proprietary Position only)
- B. 900 contracts (Gross Proprietary + Net Client Position)
- C. 1100 contracts (Net Proprietary + Absolute Net Client Long + Absolute Net Client Short)
- D. 700 contracts (Net Proprietary + Net Client Position)
- E. 6300 contracts (Gross Buy + Gross Sell of all accounts)
Answer: C
Explanation:
A trading member's open position is arrived at by summing up his proprietary and client's open positions. Proprietary positions are calculated on a net basis (Buy - Sell). Client positions are netted at the client level (contract level) and then added up across clients (without netting between clients).
Proprietary Net: 2000 - 1500 = +500 (Long).
ClientA Net: 1000 - 1200 = -200 (Short).
Client B Net: 500 - 100 = +400 (Long).
TM Open Position = Proprietary Open Position (500) + Client Open Long (400) + Client Open Short (200) = 1100 contracts.
NEW QUESTION # 31
Which of the following statements accurately describe the process and components of 'Delivery Settlement' in the equity F&O segment?
(Select all that apply)
- A. It considers all open futures positions after the close of trading on the expiry day.
- B. It considers all in-the-money option contracts which are exercised and assigned.
- C. Delivery settlement is optional and can be cash settled if the client chooses.
- D. The final deliverable/receivable positions at a clearing member are arrived at after netting the obligations of all clients/constituents clearing through them.
- E. It applies to Index Futures and Index Options.
Answer: A,B,D
Explanation:
Delivery Settlement applies to individual stock derivatives (not Index, which are cash settled). It considers all open futures positions after close of trading on expiry day and all in-the-money option contracts which are exercised and assigned. The final position at a clearing member is arrived at after netting the obligations of all clients/constituents/trading members clearing through the respective clearing member.
NEW QUESTION # 32
SEBI has formalized a Risk Based Supervision (RBS) model for market intermediaries. Which of the following sequences correctly identifies the four distinct steps of this supervision model?
- A. Client Profiling -> Transaction Monitoring Risk Rating -> Surveillance Action
- B. Internal Audit External Audit -> Risk Classification -> Penalty Determination
- C. Data Collection -> Compliance Check -> Risk Scoring -> Inspection
- D. Risk Assessment -> Assigning Risk & Impact Rating -> Determining Supervisory Risk Rating Score -> Supervisory Approach
- E. Risk Identification -> Risk Analysis -> Risk Mitigation -> Risk Reporting
Answer: D
Explanation:
The Risk Based Supervision model follows four distinct steps: a. Risk Assessment, b. Assigning Risk & Impact Rating, c. Determining Supervisory Risk Rating Score, and d. Supervisory Approach. This model divides entities into risk groups (very low to high) to determine the quantum of supervision.
NEW QUESTION # 33
Cash Management Bills (CMBs) are issued by the Government of India to fund temporary cash flow mismatches. Which of the following correctly identifies their maturity characteristics and trading platform?
- A. Maturities of exactly 91 days; Traded on NDS-CALL platform
- B. Maturities less than 91 days; Traded on NDS-OM platform
- C. Maturities up to 364 days; Traded on RFQ Platform
- D. Maturities between 91 and 182 days; Traded on CROMS
- E. Maturities less than 14 days; Traded on OTC market only
Answer: B
Explanation:
Cash Management Bills (CMBs) have maturities less than 91 days. They are issued to absorb excess liquidity and fund temporary mismatches. Like Treasury bills, they are traded on the NDS-OM platform along with Government Securities.
NEW QUESTION # 34
Regarding 'Market Makers' in the Indian securities market, which of the following statements regarding their mandatory obligations is correct?
- A. Market makers are appointed solely by SEBI and not by the Exchanges
- B. Market making has been made mandatory in respect of all scrips listed and traded on SME Exchanges
- C. Market making is voluntary for all scrips listed on Small and Medium Enterprise (SME) Exchanges
- D. Market making is restricted to the derivatives segment only
- E. Market makers are required to provide only buy quotes to ensure exit options for investors
Answer: B
Explanation:
While market making operates under guidelines, for Small and Medium Enterprise (SME) Exchanges, market making has been made mandatory in respect of all scrips listed and traded on the SME Exchange. Their main responsibility is to provide two-way (buy and sell) quotes.
NEW QUESTION # 35
What is the primary benefit of 'Interoperability' among Clearing Corporations for a Clearing Member (CM)?
- A. It allows the CM to act as a Custodian for institutional clients without separate registration.
- B. It allows the CM to execute trades on the Exchange without maintaining a Base Minimum Capital.
- C. It enables the CM to select a single Clearing Corporation to clear and settle trades executed on multiple stock exchanges.
- D. It mandates the CM to maintain separate settlement accounts for each Exchange, thereby segregating risk.
- E. It guarantees that the CM will receive interest on the cash component of the Core Settlement Guarantee Fund.
Answer: C
Explanation:
Inter-operability among Clearing Corporations enables a Clearing Member to select the Clearing Corporation of its choice to clear and settle trades executed in multiple exchanges. This allows market participants to consolidate their clearing and settlement functions at a single Clearing Corporation.
NEW QUESTION # 36
In the process of Auction of Securities, if the auction or close-out results in proceeds that exceed the claim of the aggrieved party (buyer), how is the remaining amount treated?
- A. It is credited to the Core Settlement Guarantee Fund (Core SGF).
- B. It is retained by the Clearing Corporation as administrative charges.
- C. It is transferred to the Investor Protection Fund (IPF) of the Exchange.
- D. It is refunded to the defaulting selling member.
- E. It is shared equally between the Clearing Corporation and the aggrieved party.
Answer: A
Explanation:
The Proceeds from Auction or Close-out should be used to settle the claim of the aggrieved party. Any amount remaining thereof should be credited to the Core Settlement Guarantee Fund ('Core SGF') instead of crediting it to the defaulting party's account.
NEW QUESTION # 37
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 automatically converted into liquid assets and pledged to the Core Settlement Guarantee Fund.
- B. It is returned to the Clearing Corporation to cover potential shortfalls in the subsequent settlement's auction.
- C. It must be transferred to the client's beneficiary account immediately and cannot be used for subsequent proprietary obligations.
- D. 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).
- E. It is locked in the member's pool account for 24 hours to prevent misuse.
Answer: D
Explanation:
The source states: '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).'
NEW QUESTION # 38
Under the ODR framework, what is the specific monetary threshold regarding the aggregate claim/counter-claim amount that necessitates the reference of the matter to an **Arbitral Tribunal consisting of three Arbitrators**?
- A. Exceeds Rs. 30,00,000 (Rupees Thirty Lakhs)
- B. Exceeds Rs. 20,00,000(Rupees Twenty Lakhs)
- C. Exceeds Rs. 50,00,000(Rupees Fifty Lakhs)
- D. Exceeds Rs. 1,00,00,000 (Rupees One Crore)
- E. Exceeds Rs. 10,00,000 (Rupees Ten Lakhs)
Answer: A
Explanation:
The source specifies: 'In the event that the aggregate of the claim and/or counter-claim amount exceeds Rs 30,00,000 (Rupees Thirty Lakhs) or such amount as specified from time to time, the matter shall be referred to an Arbitral Tribunal consisting of three Arbitrators'.
NEW QUESTION # 39
When determining the settlement obligations in a scenario involving holidays, why is the sequential basis of settlement (completing first settlement before starting the next) critically important?
- A. It is required to separate institutional trades from retail trades.
- B. It allows the stock exchange to close the market early.
- C. It allows the Clearing Corporation to recalculate margins for the previous week.
- D. It prevents members from trading in the derivatives segment during the cash market settlement.
- E. It ensures that the pay-out (cash/securities) from the first settlement is available to the member to meet obligations for the subsequent settlement.
Answer: E
Explanation:
The sequential basis is adopted so that '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).'
NEW QUESTION # 40
Regarding the maintenance of a Running Account for funds by a stock broker for a client, which of the following statements accurately reflects the regulatory requirement for the actual settlement of funds?
- A. Settlement is mandatory only when the credit balance exceeds Rs. 10,000; otherwise, funds can be retained indefinitely.
- B. Settlement dates are determined individually by each stock broker based on their internal risk management policy.
- C. Settlement shall be done on the first Friday and/or Saturday of every month/quarter, based on the annual calendar issued jointly by Stock Exchanges.
- D. Settlement must be done on the last trading day of every month or quarter as per the client's preference.
- E. Settlement must occur within 24 hours of the payout for every transaction, regardless of the running account authorization.
Answer: C
Explanation:
As per the source, the settlement of running accounts of funds shall be done on 'Quarterly and monthly basis, on the dates stipulated by the Exchanges'. Specifically, 'Settlement of running account shall be settled on first Friday and/or Saturday of every month/quarter.' Stock exchanges jointly issue the annual calendar for this purpose.
NEW QUESTION # 41
Regarding the 'Direct Pay-out' of securities mandated by SEBI vide circular dated June 05, 2024, which of the following operational changes has been implemented concerning the credit of securities and the settlement timing?
- A. Direct pay-out is applicable only for Institutional Clients, while Retail Clients continue to receive shares via the Broker's Pool Account.
- B. Securities are credited to the Broker's Pool Account by 1 PM, and the broker must transfer them to the client by 3:30 PM on the same day.
- C. Securities are credited to a temporary 'Client Unpaid Securities Account' maintained by the Clearing Corporation until funds are cleared.
- D. The pay-out timing remains 1 PM, but the securities are credited to the client's account on T+2 day instead of T+1.
- E. Securities are credited directly to the client's demat account by the Clearing Corporation, and the pay-out timing is revised from 1 PM to 3:30 PM.
Answer: E
Explanation:
As a consequence of the mandate for securities for pay-out to be credited directly to the respective client's demat account by the Clearing Corporations, the timing of the payout of securities shall be revised from 1 PM to 3:30 PM. As a result, securities shall be credited to the clients' demat account on the same settlement day.
NEW QUESTION # 42
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