NISM Series III-A: Securities Intermediaries Compliance (Non Fund) Mock Test (Set 1)

The individual who is aggrieved by any order of the Securities Appellate Tribunal (SAT) has the right to file an appeal to the Supreme Court. The relevant timeframe within which this appeal must be filed is 60 days from the date of the SAT order. This period of 60 days allows the concerned party sufficient time to review the SAT decision, gather necessary documents, and initiate the appeal process to the higher authority, which is the Supreme Court. Individuals must adhere to this specified time limit to ensure the timely and proper resolution of their grievances in the legal system.

A person aggrieved by any SAT decision or order may file an appeal to the Supreme Court within 60 days from the date of communication of the SAT order.

In the case of negligence causing loss to the beneficial owner, the depository shall indemnify the beneficial owner.

The appointment of a compliance officer by debenture trustees is covered under Regulation 17A of the SEBI (Debenture Trustees) Regulations, 1993.

Every member of a recognized stock exchange is required to maintain and preserve contract notes for a period of 2 years according to Rule 15(2) of the Securities Contracts (Regulation) Rules.

Section 15HB of the SEBI Act deals with penalties for contraventions where specific penalties are not explicitly provided, allowing SEBI to address regulatory violations not covered elsewhere in the legislation.

Money laundering refers to the act of disguising financial assets to use them without detection of the illegal activity that produced them.

Lead merchant bankers are responsible for both drafting and designing the offer document and capital structuring.

The Risk Management Policy of QRTAs includes measures to address operational risk, technology risk, and cybersecurity risk, ensuring a comprehensive approach to risk mitigation.

An appeal to SAT should be filed by the concerned person within 45 days from the date of receipt of the order made by SEBI or any other applicable organization.

Regulation 7B of the SEBI (Prohibition of Insider Trading) Regulations, 2015, outlines the procedure for submitting original information about insider trading violations to SEBI.

The Financial Intelligence Unit (FIU) is responsible for establishing and maintaining a database on cash and suspicious transactions, aiding in the detection of financial irregularities.

As per PMLA provisions, banking companies, financial institutions, and intermediaries are required to maintain records of both single transactions and series of transactions integrally connected to each other.

According to SEBI (ICDR) Regulations, a minimum subscription of 90% through the offer document is required for an issue to proceed.

Compliance primarily involves conforming to rules, policies, standards, or laws to ensure adherence to regulatory requirements.

Corporate stock brokers offering margin trading facilities must have a minimum net worth of Rs. 3 crore.

The Cyber Security and Cyber Resilience framework aims to identify and manage operational risks related to cybersecurity and technology.

The registrar must obtain demographic details of all applicants from depositories.

For suspicious transactions, both transactions integrally connected and remotely connected should be considered.

Post-issue activities coordinated by the Lead Merchant Banker include finalizing the basis of allotment, deciding on centers for conferences, and processing rematerialization requests.

True. Any intermediary can appeal to SAT if it is aggrieved by any order passed by SEBI.

Forward Rate Agreements are part of Currency Forwards, providing a mechanism for parties to lock in future exchange rates for currency transactions.

True. As per SEBI (Depositories and Participants) Regulations, a Depository Participant cannot increase charges/fees for services rendered without proper advance notice to the Beneficial Owners, promoting fair practices.

True. Long-term capital losses can be set off only against long-term capital gains, ensuring consistency in tax treatment.

True. An applicant incorporated in an International Financial Services Centre is deemed to be appropriately regulated, acknowledging the regulatory framework in such centers.

An intermediary can surrender the certificate of registration after meeting requirements such as transfer of records, funds of clients, redress of investor grievances, and arrangements ensuring continuity of service to clients.

True. Every stock-broker must intimate to SEBI the place where the books of accounts, records, and documents are maintained, promoting transparency.

True. All employees, directors, etc., of the intermediary must strictly adhere to the Code of Conduct as prescribed in SEBI Regulations, ensuring ethical practices.

SEBI can impose penalties under Section 15F for Insider Trading, reflecting its commitment to maintaining the integrity of the securities market.

True. Any foreign bank operating in India with the approval of the Reserve Bank of India must seek SEBI approval to become a credit agency.

Category I Alternative Investment Funds are restricted from borrowing funds, except for meeting temporary funding requirements for not more than thirty days.

A Discretionary Portfolio Manager, under a contract, exercises discretion in the investment of funds, allowing flexibility in decision-making for portfolio management.

Any body corporate, as defined under Section 2 (11) of the Companies Act, 2013, can act as a debenture trustee, expanding the pool of eligible entities.

True. SEBI can instruct an intermediary to refund money or securities collected from investors, emphasizing investor protection and market integrity.

False. Portfolio managers are restricted from leveraging clients’ portfolios for investment in derivatives, ensuring risk management and investor protection.

Losses in margin trading facilities from stock brokers are not covered under Investor Protection Fund (IPF), highlighting the need for clients to bear such losses.

True. An intermediary, after suspension of its certificate, must cease the activities for which the certificate was originally granted, ensuring regulatory compliance.

If a buyer anticipates a rise in the underlying price, they would choose to buy a Call option, providing the right to buy the underlying asset at a predetermined price.

The applicant for a credit rating agency must have a minimum net worth of Rs. 25 crore, ensuring financial stability and credibility in the credit rating process.

A limited liability partnership firm acting as a research entity must appoint a Compliance Officer responsible for monitoring compliance with SEBI (Research Analysts) Regulations, 2014.

Money-laundering offenders can face rigorous imprisonment for a term greater than 3 years and may be liable to fines, emphasizing the severity of consequences.

Every banker to an issue must maintain records of refund monies paid to investors for a minimum period of 8 years, ensuring documentation compliance..

The uninvested portion of AIG’s investable funds can be placed in Liquid Mutual funds, providing flexibility and liquidity for efficient fund management.

The certificate granted under SEBI (CAPSM) Regulations, 2007, remains valid for 5 years from the date of issuance, ensuring regulatory compliance for the specified duration.