The intermediary shall have the ultimate responsibility for the Know Your Customer (KYC) of its clients. This includes conducting due diligence, collecting necessary information, and ensuring compliance with KYC regulations to mitigate risks associated with financial transactions.

Trading ahead is the term used for the transaction where an intermediary with knowledge of an impending customer block order trades ahead of that order for the intermediary’s own profit. This practice is considered unethical and can be a form of front-running.

False. The depository participant is required to comply with the award of the Ombudsman passed under SEBI (Ombudsman) Regulations, 2003. Non-compliance with the Ombudsman’s award could lead to regulatory actions and penalties.

Regulation 15 of SEBI (Investment Advisers) Regulations, 2013 states that an investment adviser shall ensure to meet the client’s investment objective. This regulation emphasizes the importance of aligning the advice provided by investment advisers with the specific investment goals and objectives of their clients.

False. The banker to an issue shall not act in collusion with other intermediaries or the issuer in a manner that is detrimental to the investor. This statement emphasizes the requirement for ethical conduct and fair dealing in the issuance process, ensuring the protection of investor interests.

Depositories hold the responsibility for the collection of stamp duty on transactions by the transferor of securities. This is part of the regulatory framework to ensure proper documentation and compliance with stamp duty requirements in securities transactions.

True. A depository participant may delegate its functions to any other person with the prior approval of the depository. However, such delegation is subject to regulatory oversight and requires approval to ensure that the delegated functions are carried out effectively and in compliance with the necessary regulations.

Regulation 15 of SEBI (Investment Advisers) Regulations, 2013, states that an investment adviser shall ensure to meet the client’s investment objective. This regulation emphasizes the responsibility of investment advisers to align their advice with the specific investment goals and objectives of their clients.

Both insurance companies and scheduled banks carrying on commercial activity can act as debenture trustees. These entities play a crucial role in safeguarding the interests of debenture holders and ensuring compliance with relevant regulations.

The debenture trustee shall comply with the award of the Ombudsman passed under the Securities and Exchange Board of India (Ombudsman) Regulations, 2003. This ensures that the decisions and awards made by the Ombudsman, as per the regulatory framework, are binding on the debenture trustee, promoting accountability and resolution of disputes.

Self-front-running occurs when a purchaser of a block trade engages in the offsetting futures to hedge against price fluctuations caused by the block transaction. In this scenario, the individual or entity initiating the block trade takes actions to protect themselves from potential price changes, and this is referred to as self-front-running.

A credit rating agency shall not change the rating definition or structure for a particular rating product without prior information to SEBI. This ensures transparency and consistency in the rating process.

According to SEBI (Intermediaries) Regulations, 2008, an intermediary is required to provide SEBI with a certificate on the 1st of April every year regarding the appointment of its compliance officer. This ensures that the intermediary has a designated compliance officer to oversee and ensure adherence to regulatory requirements.

Stock exchanges operating in the GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) are permitted to offer trading in securities in any currency other than the Indian rupee. This allows for a broader range of currency options for trading activities within the IFSC.

Spot contracts are contracts to buy or sell a security for immediate settlement on the date, typically two days after the trade date. In a spot transaction, the delivery of the asset and the payment occur almost immediately, or “on the spot,” upon the agreement between the parties.

The statement is false because using one client’s funds for margin trading on behalf of another client requires authorization from the client whose funds are being used, and the statement does not specify such authorization.

An investment adviser is required to disclose both its investment holdings and disciplinary history to the client for transparency and to provide relevant information that may impact the client’s decision-making process.

Regulation 7D under the SEBI (Prohibition of Insider Trading) Regulations, 2015, specifically addresses the eligibility criteria for an informant to be eligible for a reward concerning the submitted original information related to an alleged violation.

The statement is true. Immunity under the Depositories Act can be granted by the Central Government on the recommendation of SEBI, but this is contingent upon the person making a full disclosure of the violation.

The transfer of funds in the forex market depends on the exchange rate, which is the rate at which one currency can be exchanged for another.

An intermediary may surrender its certificate of registration by making a request to SEBI (Securities and Exchange Board of India), the regulatory authority overseeing securities markets in India.

The statement is true. In the context of registering to an issue, the entity shall be responsible for the acts or omissions of its employees and agents concerning the conduct of its business.

After the suspension of its certificate, an intermediary is typically allowed to allow its clients to withdraw securities held in its custody to ensure the protection of clients’ interests during the suspension period.

The certificate given under Regulation 3 of SEBI (Collective Investment Schemes) Regulations, 2007, is valid for a period of 3 years from the date of the grant of the certificate or revalidation.

The rating assigned to any listed securities of a client, after periodic review, including changes in rating, shall be intimated to the Stock Exchange. This ensures transparency and dissemination of relevant information to the market.

An integrated and comprehensive view of risks to Qualified Registrars and Share Transfer Agents (RTAs) includes risks emanating from both vendors and outsourced third parties.

Every underwriter, when called upon to subscribe for securities issued by a body corporate, is required to subscribe to such securities within 45 days of receiving the intimation from the body corporate.

An applicant for the custodian of securities is required to have a minimum net worth of Rs. 50 crores, as per regulatory requirements.

The Securities Appellate Tribunal (SAT) is established under Section 15K (1) of the Securities and Exchange Board of India (SEBI) Act.

Section 15B of the SEBI Act empowers SEBI to impose penalties for the failure by any person to enter into an agreement with clients.

The issuer shall specify the International Securities Identification Number (ISIN) for rights entitlement while announcing the record date. ISIN is a unique identifier for a specific security, helping in the standardized identification of financial instruments.

Section 30 of the SEBI Act, 1992, prohibits fraudulent, unfair, and manipulative trade practices in securities. This section empowers SEBI to take necessary actions to prevent such practices and protect the interests of investors and the securities market.

Transfer to and from the accounts of the client should be made only on receipt of instructions from the beneficial owner. This ensures that transfers are carried out based on the explicit directions of the owner of the securities.

Regulation 2 of SEBI (Collective Investment Schemes) Regulations, 2007 specifies the manner of obtaining the certificate for the first time under the said regulations.

The statement is false. Regulation 7E of SEBI (Prohibition of Insider Trading) Regulations, 2015, does not specifically specify the process for the determination of the amount of reward to an informant. The regulations do outline eligibility criteria for rewards, but the determination process is not explicitly mentioned.

True. According to SEBI (Research Analysts) Regulations, a research analyst or research entity is required to conduct an annual audit in respect of compliance with these regulations, and the audit should be conducted by a member of the Institute of Chartered Accountants of India (ICAI).

“Regulation 19 of the SEBI (Intermediaries) Regulations, 2008” specifies that the intermediary shall allow the inspecting authority to have reasonable access to the premises occupied by such intermediary. This is to facilitate inspections and ensure compliance with regulatory requirements.

Certificates of deposit are money market instruments. Money market instruments are short-term debt securities that are highly liquid and typically have a maturity of one year or less. Mutual funds and bonds are not classified as money market instruments.

False. All suspicious transactions, whether or not made in cash, have to be maintained for a period of 10 years, not 25 years. This is in accordance with anti-money laundering regulations to facilitate investigations and regulatory oversight.

KRA (KYC Registration Agency) shall send a letter to the client within 10 days of the receipt of the initial/updated KYC documents from the intermediary, confirming the details thereof, and maintain the proof of dispatch. This ensures timely communication and confirmation of the KYC details.

Bankers to an Issue hold the responsibility to disallow blank application forms bearing brokers’ stamp to be kept at the bank premises. This is to prevent misuse and ensure the integrity of the application process during a securities issue.

True. No payment of transactions in which the member broker takes a position as a principal will be allowed to be made from the client’s account. This rule ensures the protection of client funds and prevents any potential misuse by the broker.

The term legitimate purpose shall include sharing of unpublished price sensitive information in the ordinary course of business by an insider with suppliers, insolvency professionals, merchant bankers, and others without prohibition of the act, as specified in insider trading regulations.

A Depository Participant should maintain records of details of securities rematerialized, details of securities dematerialized, and records of all transactions entered into with the Depository. This ensures proper documentation and transparency in the depository operations.

Section 15C of the SEBI Act empowers SEBI to impose penalties for the failure to redress investors’ grievances. This emphasizes the importance of addressing and resolving grievances to protect the interests of investors in the securities market.

Regulation 7I of SEBI (Prohibition of Insider Trading) Regulations, 2015, specifies the requirements to be followed for the protection against victimization and retaliation of informants who provide information related to insider trading violations.

The compliance officer shall report to both the intermediary and the board of directors in writing of any material non-compliance by the intermediary. This ensures that appropriate actions can be taken to address non-compliance and uphold regulatory standards.

True. KRA (KYC Registration Agency) systems shall clearly indicate the status of clients falling under PAN exempt categories. This is to ensure transparency and proper handling of clients falling under specific categories exempt from providing PAN (Permanent Account Number) for KYC purposes.

Section 15H of the SEBI Act empowers SEBI to impose penalties for the non-disclosure of acquisition of shares and takeovers. This is a regulatory measure to ensure transparency and proper disclosure in the securities market.

If the stock broker seeking to act as a depository participant has a minimum net worth of Rs.10 crores, the limit on the aggregate value of the portfolio is not applicable. This requirement ensures financial strength and stability for entities engaging in depository participant services.

Investment bankers provide a host of specialized corporate advisory services in the areas of project advisory, business and financial advisory, and mergers and acquisitions. Their expertise lies in providing strategic advice to corporations on various financial aspects and facilitating transactions.

The Securities Contracts (Regulation) Act, 1956, gives the Central government regulatory jurisdiction over stock exchanges, contracts in securities, and listing of securities on stock exchanges. This regulatory framework helps ensure the orderly functioning and integrity of the securities market.

True. All series of cash transactions integrally connected to each other, which have been valued below Rs. 10 lakh, have to be maintained for a period of 10 years. This is in line with regulatory requirements to monitor and track such transactions for anti-money laundering purposes.

A depository participant shall maintain a proper inward system for all types of mail received in all forms. This ensures organized record-keeping and management of incoming communications, facilitating efficient operations.

The Prevention of Money Laundering Act (PMLA) is applicable to banking institutions, non-banking financial institutions, companies offering foreign exchange services, and various other entities. The act aims to prevent money laundering and the financing of terrorist activities, making it applicable to a wide range of financial institutions and entities.

Margin Trading Facility refers to the facility where the transaction value due to the Stock Exchange, during share purchase, shall be paid by the broker on behalf of the client. This allows clients to buy shares even if they don’t have the full funds, with the understanding that they will repay the broker later.