NISM Series III-A: Securities Intermediaries Compliance (Non Fund) Mock Test (Set 5)

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1. The act of failure to redress the grievances of any investor by a stock broker is penalized under –

a) Section 23C of SCRA

b) Section 23A of SCRA

c) Section 23D of SCRA

d) Section 23B of SCRA

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2. The holding company or associate company or subsidiary company of the concerned company is considered as a connected person.

a) False

b) True

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3. _____ are agreements between two or more parties to exchange series of cash flows in the same currency over an agreed period of time.

a) Currency options

b) Currency futures

c) Interest-rate Options

d) Interest rate swaps

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4. In case of a book built issue, the issuer may mention a price or a price band in the _________

a) Abridged prospectus

b) General prospectus

c) Offer document

d) Red herring prospectus

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5. Rule 15(1) of Securities Contracts (Regulation) Rules requires every member of a recognized stock exchange is required to maintain and preserve the books of account and documents for a period of ______.

a) 1 year

b) 5 years

c) 2 years

d) 3 years

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6. The KRA shall send the action taken report to SEBI within ______ of placing audit report before BOD

a) 6 weeks

b) 3 months

c) 8 weeks

d) 1 month

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7. The portfolio manager shall execute off market transfers in client’s account for ________

a) Providing margin or collateral for clients’ own positions

b) Settlement of the clients’ own trades

c) Dealing in listed securities

d) Both 1 and 2

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8. ______ provides for the establishment of depositories in securities with the objective of ensuring free transferability of securities with speed, accuracy and security.

a) SEBI SAST Regulations, 2003

b) SEBI (Underwriters) Regulations, 1993

c) SEBI (Merchant Banking) Regulations, 1992

d) Depositories Act, 1996

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9. QRTAs, servicing mutual Funds investors, must have investor service center in at least ______

a) 150 cities

b) 100 cities

c) 300 cities

d) 250 cities

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10. Any person aggrieved by an order of the SEBI or Adjudicating Officer may prefer an appeal to ________

a) SAT

b) Supreme court

c) Central Government

d) Exchange

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11. In the event of non-receipt of minimum subscription, all application moneys received shall be refunded to the applicants within ______ of the closure of the issue.

a) 45 days

b) 15 days

c) 30 days

d) 60 days

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12. The records and documents of a DP should be reconciled with the depository on ___________

a) Weekly basis

b) Monthly basis

c) Yearly basis

d) Daily basis

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13. All records of public appearance shall be maintained either in physical or electronic form and preserved for a minimum period of _______

a) 3 years

b) 2 years

c) 8 years

d) 5 years

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14. The stock broker shall maintain a separate record of details of ______ for the purpose of margin trading.

a) Sources of funds

b) Funds used

c) Application of funds

d) Both 1 and 2

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15. Which of the following constitute the mandatory part of client agreement ?

a) Know Your Client

b) Risk Disclosure Document

c) Both 1 and 2

d) Bank pass book

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16. A depository participant should submit periodic returns to which of the following?

a) SEBI

b) Depository

c) Exchanges

d) Both 1 and 2

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17. When the rights issue is of size less than ______ the issuer shall prepare the letter of offer in accordance with requirements as specified in these regulations and file the same with the SEBI.

a) Rs. 15 crore

b) Rs. 15 crore

c) Rs. 20 crore

d) Rs. 10 crore

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18. Which of the following are considered as action of default by a depository participant ?

a) Failure co-operate in any inspection by SEBI

b) Failure to pay the annual fee

c) Both 1 and 2

d) None of the above

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19. If there are 2 consecutive defaults in payment of interest to the debenture holders, then the debenture trustee ________

a) Appoints Nominee director on BOD

b) Appoints Compliance officer on BOD

c) Appoints Principal officer on BOD

d) None of the above

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20. ______ not in line with the principle of fair and equitable markets.

a) Private placement

b) Rights issue

c) Insider Trading

d) Employee stock option

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21. Insider is any person who is a connected person or in possession of or having access to ______.

a) Unpublished private sensitive information

b) Undefined public sensitive information

c) Unpublished price sensitive information

d) Undefined price sensitive information

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22. In exchange-traded funds the buying and selling takes place at the closing –

a) Price of underlying

b) Net asset value

c) Price nearer to seller's bid

d) Either 1 or 3

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23. Under regulation 8(1), it shall be the duty of every person who is under investigation to –

a) Produce required books, accounts and documents

b) Appear before the Investigating Authority personally

c) Both 1 and 2

d) Conceal insider information from the authority

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24. After considering the report of the designated authority, the designated member shall issue a show-cause notice to the notice who shall reply –

a) Within 14 days

b) Within 7 days

c) Within 30 days

d) Within 21 days

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25. Every reporting entity shall, prior to the commencement of each specified transaction should take steps to –

a) Examine the ownership and financial position

b) Examine the liquidity

c) Examine the credibility

d) All the above

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26. Listing of Alternative Investment Fund units shall be permitted only after final close of the fund or scheme.

a) False

b) True

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27. When the trading window is open, trading by designated persons shall be subject to preclearance by the compliance officer, if the value of the proposed trades is above such thresholds as the board of directors may stipulate. State True or False?

a) True

b) False

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28. The portfolio manager shall _________

a) Deploy the clients' funds in bill discounting

b) Deploy the clients' funds in badla financing

c) Deploy the clients' funds for the purpose of lending

d) None of the above

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29. A custodian is involved in undertaking activities as a ______ in terms of the Companies ( Issue of IDR ) Rules, 2004.

a) Portfolio manager

b) Merchant banker

c) Underwriter

d) Domestic Depository

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30. As per the SEBI (Debenture Trustees) Regulations, debenture trustee shall communicate to the debenture holders on _______________ basis regarding compliance, defaults, etc. and the action taken by it.

a) Annually

b) Half yearly

c) Monthly

d) Quarterly

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31. Safekeeping and record keeping of securities is done by ___________.

a) Custodians

b) Venture Capital Funds

c) Mutual funds

d) Brokers

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32. ______ are agreements between parties that facilitate borrowing in foreign currencies at lower costs.

a) Currency futures

b) Currency swaps

c) Currency forwards

d) Currency options

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33. On being granted the certificate of registration, the custodian needs to pay SEBI an annual fee of Rs. 10 lakh or _____ of the ‘assets under custody’ of the custodian, whichever is higher.

a) 0.5%

b) 0.005%

c) 0.05%

d) 0.0005%

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34. Section 15T of SEBI Act provides which of the following ?

a) Right to appeal to the SAT

b) Right to appeal to the SEBI

c) Right to appeal to NCLT

d) Right to appeal to the Supreme court

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35. A debenture trustee may share information available with it regarding client companies, with registered credit rating agencies.

a) False

b) True

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36. With whom shall KRA have secure data transmission links that upload the KYC documents on its system?

a) Intermediaries

b) Other KRAs

c) Exchanges

d) Both a and b

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37. Which of the following is NOT the activity performed by Bankers to an Issue?

a) Payment of dividend or interest warrant

b) Acceptance of call monies

c) Collection of securities transaction tax

d) Acceptance of application monies

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38. As per SEBI (ICDR) Regulation, an advertisement may be issued giving any impression that the issue has been fully subscribed or oversubscribed during the period the issue is open for sub‐scription, with prior intimation to SEBI. State whether the above statement is true or false.

a) True

b) False

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39. What does SEBI prohibit Bankers to an Issue from participating in under the Code of Conduct?

a) Price rigging or manipulation

b) Passing of unpublished price sensitive information

c) Creation of false market

d) All of the above

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40. How does the SEBI (Debenture Trustees) Regulations mandate debenture trustees to communicate with debenture holders regarding compliance, defaults, etc., and the subsequent actions taken?

a) Quarterly

b) Monthly

c) Annually

d) Half yearly

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41. What portion of the corpus must Category I and II Alternative Investment Funds invest in one Investee Company?

a) Maximum 10%

b) Not more than 45%

c) Not more than 50%

d) Not more than 25%

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42. What is excluded from the definition of ‘Security’ as per the Securities Contract Regulation Act (SCRA)?

a) Bullion

b) Shares

c) Derivatives

d) Bonds

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43. Has the Banker to an Issue breached the Code of Conduct set by SEBI by permitting blank application forms affixed with brokers’ stamps to be retained at the bank premises?

a) Yes

b) No

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44. For how many years should the underwriter preserve documents, books of accounts, and other records pertaining to its underwriting activities?

a) 3

b) 5

c) 9

d) 7

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45. How often should Depository Participants reconcile records and documents with each depository, according to the SEBI (Depositories and Participants) Regulations?

a) Two‐day

b) Fortnightly

c) Daily

d) Weekly

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46. For how many years is the certificate of registration as a Debenture Trustee valid, according to the SEBI (Debenture Trustee) Regulations?

a) 1

b) Permanently until suspended

c) 4

d) 2

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47. Is it true that according to SEBI (ICDR) Regulation, only audited and consolidated financial statements need to be prepared in accordance with GAAP?

a) True

b) False

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48. A foreign portfolio investor shall invest only in which of the following securities:

a) Derivatives traded on a recognised stock exchange

b) Rupee denominated credit enhanced bonds

c) Domestic Mutual Fund Schemes

d) All of the above

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49. Which authority was established with the primary responsibility of promoting old age income security through the establishment, development, and regulation of pension funds?

a) Pension Fund Regulatory Development Authority

b) Association of Mutual Funds in India

c) Securities Exchange Board of India

d) Insurance and Regulatory Development Authority

50 / 50

50. Is it true that the debenture trustee is required to comply with the awards passed under the Securities and Exchange Board of India (Ombudsman) Regulations, 2003?

a) True

b) False

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NISM Series III-A: Securities Intermediaries Compliance (Non Fund) Mock Test (Set 5)