NISM Series IX: Merchant Banking Certification Mock Test (Set 5)

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1 / 50

In simpler terms: Before selling shares through the stock exchange, the seller(s) must announce their plan by 5 pm at least ______ days in advance.

a) T-2

b) T-1

c) T-4

d) T-3

2 / 50

In a fixed price issue, there is no Red Herring prospectus. Is this statement true or false?

a) False

b) True

3 / 50

3. What activities, other than advising and underwriting, can a Category 1 Merchant Banker engage in?

a) Arranging for the demat of securities

b) Legal advisor to the issue

c) Record keeping of all the applicants

d) Issue Management

4 / 50

In a Book Built offer, if the floor price is set at Rs 1000, then the cap cannot go beyond ______.

a) Rs. 1200

b) Rs. 800

c) Rs. 900

d) Rs. 1100

5 / 50

5. In an initial public offer, the entire pre-issue capital held by individuals other than promoters must be locked-in for a period of ____ year, with some exceptions.

a) 5

b) 1

c) 3

d) 2

6 / 50

According to stock exchange listing agreements, the issuer’s minimum market capitalization should be _________.

a) Rs 50 crores

b) Rs 100 crores

c) Rs 25 crores

d) Rs 75 crores

7 / 50

According to SEBI (Delisting of Equity Shares) Regulations, it is the responsibility of the promoter and the compliance officer to ensure compliance with SEBI’s regulations. Is this statement true or false?

a) False

b) True

8 / 50

According to SEBI Merchant Banking regulations, every merchant banker must inform SEBI about the location where the books of account, records, and documents are kept. Is this statement true or false?

a) False

b) True

9 / 50

Any non-promoter shareholder of eligible companies holding at least _____ of the share capital is also allowed to sell shares through the Offer For Sale (OFS) mechanism.

a) 5%

b) 15%

c) 20%

d) 10%

10 / 50

10.

Any company that has been delisted under the voluntary delisting clause cannot apply for relisting its shares for a period of ________.

a) Two years

b) Three years

c) One year

d) Five years

11 / 50

11.

The advertisement for a Rights Issue shall be made in at least __________.

a) 1 Hindi national daily newspaper with wide circulation

b) 1 regional language daily newspaper with wide circulation at the place where registered office of the issuer is situated

c) 1 English national daily newspaper with wide circulation

d) All of the above

12 / 50

12. To issue securities, an issuer needs to submit a draft offer document to ________ through the appointed lead merchant banker and pay the required fees as outlined in the SEBI (ICDR) Regulations.

a) SEBI

b) Commerce Ministry

c) Registrar of Companies

d) RBI

13 / 50

13.

The SEBI Merchant Banking Regulations of 1992 provide for cases that are exempt from the obligation to make an open offer. Is this statement true or false?

a) False

b) True

14 / 50

14.

According to SEBI (ICDR) regulations, the issuer company must have a net worth of at least Rs 5 crore in each of the preceding three full years to be eligible to come out with a public issue. Is this statement true or false?

a) True

b) False

15 / 50

15.

The Regulation 7 of the SEBI MB Regulations specifies that the capital adequacy requirement for applicants seeking registration as Merchant Bankers is that they shall have a net worth of not less than Rs 2 crore. Is this statement true or false?

a) False

b) True

16 / 50

16.

As per the SEBI Merchant Banker Regulation, for every issue, the lead manager will accept a minimum underwriting obligation of ______ of the total underwriting commitment or Rs ____ lakh, whichever is lesser.

a) 3% , 20 lakh

b) 5% , 30 lakh

c) 5% , 25 lakh

d) 10% , 25 lakh

17 / 50

17. ____________ of an issue are primarily responsible for the pricing, financing and distribution of the securities

a) Issuer Company

b) Lead managers

c) Custodians

d) Underwriters

18 / 50

18. To streamline the settlement procedure, the Depositories Act contemplates the transfer of ownership of securities _________ by book entry

a) Physically

b) Manually

c) Superficially

d) Electronically

19 / 50

19. The SEBI delisting regulations shall not apply to any delisting made pursuant to a scheme sanctioned by the _______

a) Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985

b) National Company Law Tribunal under section 424D of the Companies Act, 1956

c) Either 1 and 2

d) None of the above

20 / 50

20. Disinvestment transactions can be in the form of offer for Sale through the Stock Exchange Mechanism – State True or False ?

a) False

b) True

21 / 50

21.

In Offer For Sale through Stock Exchange Mechanism, the size of the offer for sale of shares shall be a minimum of _______.

a) Rs. 25 crores

b) Rs. 100 crores

c) Rs. 75 crores

d) Rs. 50 crores

22 / 50

22. Who are the primary investors in the government securities market in India?

a) State Governments

b) Banks and Insurance Companies

c) Provident Funds

d) All of the Above

23 / 50

23.

What is the minimum net worth required, as per SEBI regulations, to be eligible to become a Merchant Banker?

a) Rs 7.5 crore

b) Rs 2 crore

c) Rs 10 crore

d) Rs 5 crore

24 / 50

24. In an issue where any of the merchant bankers is an associate of the issuer, it shall declare itself as a _______ and its role shall be limited to ________ of the issue.

a) Marketing lead manager , Marketing

b) Registrar to the issue , Due diligence

c) Lead manager , Advertising

d) Marketing lead manager , Due diligence

25 / 50

25.

As and when required by any investor, the ________ and the recognized stock exchange should provide a copy of the draft offer document and final offer document for a reasonable price.

a) SEBI

b) Issuer

c) Lead merchant banker

d) Custodian

26 / 50

26. The Merchant Banker has to ensure that the dispatch of ______ is /are done by way of registered post or certificate of posting only.

a) Share certificate

b) Allotment letters

c) Refund orders

d) All of the above

27 / 50

27.

_______ are investment vehicles where individuals with similar investment objectives come together to pool their money.

a) Bonds

b) Forwards

c) Debentures

d) Mutual Funds

28 / 50

28.

In which market are securities issued to investors for the first time?

a) Repo Market

b) Currency Market

c) Primary Market

d) Secondary Market

29 / 50

29.

According to the SEBI (Certification of Associated Persons in Securities Markets) rules, a Principal may obtain the certificate through which of the following ways?

a) Passing the relevant certificate examination, as may be specified by NISM.

b) Delivering at least four sessions in specific CPE program, as may be specified by NISM.

c) Successfully completing a related CPE Program, as may be specified by NISM.

d) Any of the above

30 / 50

30. According to the SEBI (Substantial Acquisition of shares and takeovers) Regulations, the balance of the escrow account after transferring cash to the special escrow account shall be released to the acquirer on the expiry of ________ from the completion of payment of consideration to shareholders who have tendered their shares in acceptance of the open offer.

a) 10 days

b) 60 days

c) 30 days

d) 15 days

31 / 50

31.

Whom does the issuer company appoint at all collection centers for any issue that is not a book building issue?

a) Bankers to the issue

b) Individual collecting agents as appointed by the issuer company

c) Syndicate Members

d) Debenture Trustee

32 / 50

32. According to the SEBI (Substantial Acquisition of shares and takeovers) Regulations, the amount deposited in the escrow account with the bank shall be released to the acquirer upon the expiry of _____ from the completion of the payment of consideration to shareholders who have tendered their shares in acceptance of the open offer

a) 7 days

b) 21 days

c) 15 days

d) 30 days

33 / 50

33.

What function(s) does a Merchant Banker perform in the case of a merger?

a) Valuation and due diligence

b) Preparation and circulation of information memoranda

c) Deal structuring amp; negotiations

d) All of the above

34 / 50

34.

Any company to be eligible for listing on the National Stock Exchange should have a track record of profitability of at least ________.

a) 1 year

b) 3 years

c) 2 years

d) 5 years

35 / 50

35.

Can a company repurchase its shares or other specified securities from any person through negotiated deals?

a) No

b) Yes

36 / 50

36.

_________ means a prospectus in respect of which the securities or class of securities included therein are issued for subscription in one or more issues over a certain period without the issue of a further prospectus.

a) File Prospectus

b) Table Prospectus

c) Shelf Prospectus

d) Drawer Prospectus

37 / 50

37.

If a company registered with SEBI as a ‘Registrar to an Issue’ is itself coming out with a public issue, can it act as its own Registrar to an Issue?

a) Yes, it can act as the registrar to the issue for its own public issue

b) No, it has to appoint a new registrar to the issue

38 / 50

38.

As per SEBI (ICDR) Regulation, the reservation on a competitive basis shall be subject to __________.

a) The aggregate of reservations for employees shall not exceed 5% of the post issue capital of the issuer

b) Any unsubscribed portion in any reserved category may be added to any other reserved category and the unsubscribed portion, if any, after such inter-se adjustments among the reserved categories shall be added to the net offer to the public category

c) Reservation for shareholders shall not exceed 10% of the issue size

d) All of the above

39 / 50

39.

The Red herring prospectus, Prospectus, or Shelf prospectus shall contain all disclosures as specified in __________.

a) SEBI ICDR Regulations

b) Companies Act

c) Both 1 and 2

d) None of the above

40 / 50

40.

__________ explains the details of derivatives contracts and other contracts and how they should be dealt with in the securities market.

a) Depositories Act

b) SEBI Act

c) Companies Act

d) The Securities Contracts (Regulation) Act

41 / 50

41.

On being intimated of the grant of registration certificate the merchant banker is required to pay the requisite fees as mentioned in the SEBI (Merchant Bankers) Regulations within ______ days of receipt of such intimation from SEBI

a) 10

b) 21

c) 15

d) 30

42 / 50

42.

Which Act deals with laws pertaining to both listed and unlisted companies?

a) FEMA

b) Companies Act

c) SEBI Act

d) SCRA

43 / 50

43.

The applicant merchant banker has to pay the requisite fees within 10 days of being intimated by SEBI that the registration certificate has been granted. Is this statement true or false?

a) True

b) False

44 / 50

44.

As per the SEBI (Delisting of Equity Shares) Regulations, 2009, the promoter is required to dispatch the letter of offer to the public shareholders of equity shares not later than ______ working days from the date of the public announcement.

a) 30

b) 75

c) 45

d) 60

45 / 50

45.

The regulation of pension funds in India is done by ______.

a) SEBI

b) IRDAI

c) AMFI

d) PFRDA

46 / 50

46.

In case a company wants to delist its shares from a stock exchange, it will be the responsibility of _______ to ensure compliance with the provisions of SEBI regulations.

a) The Promoters and Merchant Bankers

b) The Debenture Trustee

c) The Registrar and Transfer Agent

d) The Custodian

47 / 50

47.

An applicant merchant banker is required to pay the requisite fees within _______ days of being intimated of the grant of the registration certificate by SEBI.

a) 15 days

b) 45 days

c) 7 days

d) 30 days

48 / 50

48.

In any issue that is NOT a book-building issue, the issuer company appoints _________ at all mandatory collection centers.

a) Syndicate members

b) Stock brokers

c) Collection agents

d) Bankers to issue

49 / 50

49.

The Banker to an issue is required to certify that all the SEBI guidelines have been adhered to while framing the scheme of Employee Stock Options by the company. Is this statement true or false?

a) False

b) True

50 / 50

50.

The non-refundable fees payable to SEBI are prescribed in the SEBI (Substantial Acquisition of shares and takeovers – SAST) Regulations. For an open offer above Rs 10 crore but less than Rs 1000 crore, it is Rs ______ plus 0.025% of the portion of the offer size in excess of Rs Ten crore.

a) 50000

b) 200000

c) 125000

d) 100000

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NISM Series IX: Merchant Banking Certification Mock Test (Set 5)