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NISM Series VII - Securities Operations and Risk Management Certification Sample Questions (Q198-Q203):
NEW QUESTION # 198
In the General Clearing Process for the Cash Segment under the T+1 rolling settlement cycle, by what specific time must the custodial confirmation of trades be completed on the T+1 day?
- A. By 9:00 AM on T+1 Day
- B. By 1:30 PM on T+1 Day
- C. By 11:00 AM on T+1 Day
- D. By 7:30 AM on T+1 Day
- E. By 4:15 PM on T Day
Answer: D
Explanation:
According to the General Clearing process in Cash Segment for T+1 rolling settlement, the clearing members/custodians must confirm back institutional/Custodian Participant trades by 7:30 a.m. on T+1 day. Subsequently, the final obligations are downloaded by 9:00 a.m.
NEW QUESTION # 199
While most delivery shortages in compulsory rolling settlements are handled via auction, certain cases result in a direct close-out. For which of the following scenarios is the auction mechanism NOT conducted, and the trade is directly closed out?
- A. Shortages where the quantity is less than 500 shares.
- B. Shortages in A-Group liquid securities with high trading volume.
- C. Shortages in securities that are under 'Trade for Trade' category or currently under corporate action.
- D. Shortages caused by a technical glitch in the broker's back-office software.
- E. Shortages arising from institutional trades where the custodian has rejected the trade.
Answer: C
Explanation:
In certain delivery shortages, the clearing corporation directly does the close-out without conducting an auction. Examples include 'Securities under trade for trade category, securities under corporate action, trades done on block deal window', etc.
NEW QUESTION # 200
Which of the following statements correctly describe the logic for blocking margins from collateral for different types of trades under the client collateral segregation framework? (Select all that apply)
- A. For a client trade, if TM proprietary collateral is insufficient, the residual margin is blocked from the collateral of other clients of the same TM.
- B. If a CM'S proprietary collateral is insufficient for a TM's proprietary trade, the CC utilizes the Core SGF immediately.
- C. For a trade from a client account, if client collateral is insufficient, the residual margin is blocked from the TM proprietary collateral.
- D. Margins based on trades from the proprietary account of the CM are blocked from the proprietary collateral of the CM only.
- E. For a trade from the proprietary account of a TM, margin is first blocked from the TM proprietary collateral, and if insufficient, from the CM proprietary collateral.
Answer: C,D,E
Explanation:
Statement A is correct: Client trade margin logic is Client Collateral -> TM Prop -> CM Prop. Statement B is correct: TM Prop trade margin logic is TM Prop CM Prop. Statement C is correct: CM Prop trade margin logic is CM Prop only. Statement D is incorrect because client collateral is segregated and cannot be used for other clients or prop trades. Statement E is incorrect as it refers to the default waterfall, not the initial blocking logic.
NEW QUESTION # 201
Entities operating in the IFSC at GIFT City are recognized as non-resident entities under FEMA regulations. Which combination of fiscal incentives is explicitly available to these entities?
- A. Rebate on Corporate Tax for the first 2 years only.
- B. Exemption from Security Transaction Tax (STT), Commodity Transaction Tax (CT T), Dividend Distribution Tax (DDT), and Capital Gains waiver.
- C. Exemption from GST only.
- D. Exemption from Stamp Duty and Registration Fees only.
- E. Waiver of Import Duty on Gold and Silver only.
Answer: B
Explanation:
The IFSC at GIFT, Gandhinagar is a deemed foreign territory where entities are recognized as non-resident entities under FEMA regulations. The benefits provided include exemptions from security transaction tax (STT), commodity transaction tax, dividend distribution tax, capital gains waiver, and no income tax.
NEW QUESTION # 202
SEBI has introduced the mechanism of Net Settlement of cash segment and F&O segment upon expiry of stock derivatives. Under which of the following conditions is this benefit of netting (merged settlements) specifically available to an investor?
- A. When the investor trades and clears through the same Trading Member (TM) - Clearing Member (CM) combination in both Cash and F&O segments.
- B. When the investor is an Institutional Investor (including FPIs) whose transactions are backed by delivery.
- C. When the investor is a Portfolio Manager (PMS) directed to enter into delivery backed transactions only.
- D. When the investor uses different Clearing Members for Cash and F&O segments but they are interoperable.
- E. When the investor trades in highly correlated indices across different exchanges.
Answer: A
Explanation:
The benefit of netting (merged settlements) shall be available to investors whose trading member (TM) clears trades in F&O segment and cash segment through the same clearing member (CM). It is not available for institutional investors or PMS directed to do delivery backed transactions.
NEW QUESTION # 203
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