Latest Success Metrics For Actual NISM-Series-VII Exam (Updated 334 Questions)
Genuine NISM-Series-VII Exam Dumps Free Demo Valid QA's
NEW QUESTION # 151
According to RBI guidelines for issuance, which of the following combinations correctly specifies the minimum denomination, maturity range, and minimum credit rating required for a Commercial Paper (CP)?
- A. ?5 lakh and multiples thereof; 15 days to 3 years; Rating 'A3'
- B. ? 10 lakh and multiples thereof; 7 days to 1 year; Rating 'AA'
- C. ? 1 lakh and multiples thereof; 15 days to 1 year; Rating 'A2'
- D. ?25 lakh and multiples thereof; 30 days to 1 year; Rating 'A1'
- E. ?5 lakh and multiples thereof; 7 days to 1 year; Rating 'A3'
Answer: E
Explanation:
Commercial Papers (CPs) are issued for ?5 lakh and multiples thereof for maturities between 7 days and one year. The minimum credit rating assigned by a Credit Rating Agency (CRA) for the issuance of CPs shall be 'A3'.
NEW QUESTION # 152
A Trading Member executes trades in both T+1 and T+0 settlement cycles for the same security on the same day. Which of the following statements correctly describes the netting of obligations between these two segments?
- A. There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycle.
- B. Sell obligations in T+0 are netted against Buy obligations in T+1 to reduce margin requirements.
- C. Obligations are netted at the client level but not at the member level.
- D. Funds are netted across segments, but securities are settled separately.
- E. Netting is permitted only if the member opts for the 'Unified Settlement' facility.
Answer: A
Explanation:
The operational details for T+0 settlement explicitly state: 'There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycle.'
NEW QUESTION # 153
According to the framework for the Core Settlement Guarantee Fund (Core SGF), how is the Minimum Required Corpus (MRC) for a segment determined for the upcoming month?
- A. It is determined by the Risk Management Committee based on the highest single day loss observed in the last one year.
- B. It is calculated as 25% of the liquid net worth of the Clearing Corporation plus the total Base Minimum Capital collected from members.
- C. It is the higher of the average of all daily worst-case loss numbers determined from stress tests of the preceding month and the segment MRC as per the previous review.
- D. It is the simple average of the daily stress test losses of the preceding month, capped at 15% of the total open interest.
- E. It is fixed annually by SEBI based on the projected volume and turnover of the Clearing Corporation.
Answer: C
Explanation:
The source specifies that the MRC shall be fixed for a month. By the 15th of every month, the CC reviews/determines the MRC for the next month based on daily stress tests of the preceding month. Specifically, the MRC for the next month shall be the 'higher of the average arrived at as (v) above [Average of all the daily worst case loss numbers] and the segment MRC as per previous review.'
NEW QUESTION # 154
Regarding the execution of transfer instructions, under what condition is a Depository Participant (DP) permitted to register the transfer of securities from a beneficial owner's account?
- A. Immediately upon receipt of a market rumour regarding the security
- B. Whenever the account balance falls below the minimum required balance
- C. Only on receipt of instructions from the beneficial owner and thereafter confirming the same to the beneficial owner
- D. Based on a standing instruction from the Stock Exchange for all accounts
- E. Upon implied consent derived from the client's trading pattern
Answer: C
Explanation:
A participant shall register the transfer of securities to or from a beneficial owner's account only on receipt of instructions from the beneficial owner and thereafter confirm the same to the beneficial owner.
NEW QUESTION # 155
If a selling broker fails to deliver securities, the Clearing Corporation conducts an auction. If this auction remains unresolved because there are no sellers (Auction Fail), the transaction is subject to a 'Close out'. How is the close-out price calculated to compensate the buyer in such a scenario?
- A. At the highest price prevailing across the exchange from the day of trading up to the auction day OR 20% above the official closing price on the auction day, whichever is higher.
- B. At the average weighted trade price of the security during the last 5 trading sessions plus brokerage and statutory levies.
- C. At the standard valuation price determined by the Clearing Corporation on the T+1 pay-in day.
- D. At the closing price of the securities on the auction day plus a fixed penalty of 5%.
- E. At the highest price recorded on the exchange on the trade day only, irrespective of subsequent price movements.
Answer: A
Explanation:
According to the close-out procedure, if on the auction day there are no sellers, the Clearing Corporation carries out a 'Close out'. In this process, the buyer is compensated by paying the value of the short delivered security at the 'highest price prevailing across the stock exchange from the day of trading till the auction/close out day or 20% above the official closing price on the auction day, whichever is higher'.
NEW QUESTION # 156
Regarding the beta version of the T+0 rolling settlement cycle introduced on an optional basis, which of the following operational parameters is mandated by SEBI?
- A. Netting of pay-in and pay-out obligations is permitted between T+1 and T+0 settlement cycles to improve liquidity.
- B. There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycle.
- C. The price band in the T+0 segment will be fixed at +1- 10% of the previous day's closing price.
- D. Trading hours for the T+0 segment shall be identical to the T+1 segment, i.e., 09:15 AM to 3:30 PM.
- E. Securities shortages in the T+0 market shall be handled by conducting an auction session on T+1 day.
Answer: B
Explanation:
For the T+0 settlement cycle: There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycle. Additionally, trade timings are 09:15 AM to 1 PM, the price band is +100 basis points from the T+1 price, and security shortages are directly closed out (no auction).
NEW QUESTION # 157
A Trading Member executes the following trades in a specific scrip on a given day:
* Buy 500 shares @ Rs. 100
* Sell 300 shares @ Rs. 105
* Buy 200 shares @ Rs. 95
What are the final Net Quantity and Net Fund obligations for the member to be settled with the Clearing Corporation?
- A. Net Qty: 400 (Receive); Net Funds: Pay Rs. 69,000
- B. Net Qty: 400 (Deliver); Net Funds: Receive Rs. 37,500
- C. Net Qty: 400 (Receive); Net Funds: Pay Rs. 37,500
- D. Net Qty: 0; Net Funds: Receive Rs. 1,500
- E. Net Qty: 1000 (Receive); Net Funds: Pay Rs. 100,500
Answer: C
Explanation:
Net Quantity:
Total Buy = 500 + 200 = 700.
Total Sell = 300.
Net Qty = 700 - 300 = 400 (Buy/Receive).
Net Funds:
Outflow (Buy) = + (200*95) = 50,000 + 19,000 = Rs. 69,000.
Inflow (Sell) = 300*105 = Rs. 31 ,500.
Net Funds = Inflow - Outflow = 31 ,500 - 69,000 = -37,500.
Negative implies Pay Rs. 37,500.
NEW QUESTION # 158
The Clearing Corporation performs three main functions: clearing, settlement, and risk management. Which of the following statements accurately defines the specific scope of the 'clearing' function?
- A. It is the process of collecting margins and maintaining the Core Settlement Guarantee Fund.
- B. It involves the handling of exceptional situations like auction settlement and bad delivery.
- C. It is the mechanism of linking multiple depositories to facilitate inter-depository transfers.
- D. It is the process designed to work out what members are due to deliver and what members are due to receive on the settlement date.
- E. It is the two-way process which involves the actual transfer of funds and securities on the settlement date.
Answer: D
Explanation:
The clearing function of the clearing corporation is specifically designed to work out (a) what members are due to deliver and (b) what members are due to receive on the settlement date. This determination of obligations is distinct from 'settlement', which involves the actual transfer of funds and securities.
NEW QUESTION # 159
In the context of the clearing and settlement process within the depository system, SEBI vide its circular dated June 05, 2024, mandated a significant change regarding the pay-out of securities. Which of the following statements accurately describes this revised mechanism?
- A. Securities for pay-out must be credited to the Clearing Member's Pool Account, who then has 24 hours to transfer them to the client.
- B. The timing of the payout of securities remains 1 PM despite the direct credit mechanism.
- C. Securities are held in a temporary 'Transit Account' by the Depository until the client issues a Receipt Instruction.
- D. The direct pay-out mechanism is mandatory for all clients, including those having arrangements with SEBI registered custodians.
- E. Securities for pay-out shall be credited directly to the respective client's demat account by the Clearing Corporations.
Answer: E
Explanation:
SEBI vide circular dated June 05, 2024, has decided the securities for pay-out shall be credited directly to the respective client's demat account by the CCs. As a consequence, the timing of the payout of securities shall be revised from 1 PM to 3:30 PM. The direct payout shall not be applicable to clients having arrangements with custodians.
NEW QUESTION # 160
Which of the following statements accurately reflect the roles and functions of a Clearing Corporation as a central counterparty (COP)?
(Select all that apply)
- A. It executes client orders on the stock exchange platform on behalf of the trading members.
- B. It provides independent legal enforcement of contracts, reducing the need for buyers and sellers to take legal action against one another.
- C. It calculates and controls the margining mechanism.
- D. It guarantees settlement of trades through the process of novation.
- E. It reduces the number of payments due by netting transactions.
Answer: B,C,D,E
Explanation:
The Clearing Corporation guarantees settlement (novation), reduces payments via netting, provides dispute resolution/legal enforcement (buyers/sellers don't sue each other), and calculates/controls margining. Option D is incorrect because the Clearing Corporation does not execute orders; execution is the function of the Stock Exchange/Trading Members.
NEW QUESTION # 161
In the event of holidays affecting the settlement schedule, Clearing Corporations (CCs) follow specific guidelines to ensure smooth settlement. Which of the following statements accurately describes the procedure for sequential settlement and inter-depository transfers?
- A. CCs club multiple settlements into a single netted obligation to avoid sequential processing delays.
- B. CCs prioritize the settlement with the highest value regardless of the chronological order of trade dates.
- C. Settlements are postponed to the next working week to ensure all banks are operational.
- D. Depositories must facilitate inter-depository transfers within one hour and before the pay-in for the subsequent settlement begins.
- E. The pay-out from the first settlement is blocked for 24 hours and cannot be used for the subsequent settlement's pay-in.
Answer: D
Explanation:
To meet pay-in obligations for subsequent settlements during holidays, members may need to move securities from one depository to another. The depositories shall, therefore, facilitate the inter-depository transfers within one hour and before pay-in for the subsequent settlement begins.
NEW QUESTION # 162
To bring transparency to the Investor Grievance Redressal Mechanism, stock brokers are mandated to disclose data on complaints received and redressed on their respective websites. What is the specific deadline for this disclosure?
- A. By the 7th of the succeeding month
- B. By the 10th of the succeeding month
- C. By the last day of the succeeding month
- D. Within 21 days of the end of the quarter
- E. By the 15th of the succeeding month
Answer: A
Explanation:
All Stock Brokers shall disclose on their respective websites, the data on complaints received against them or against issues dealt by them and redressal thereof, latest by the seventh of the succeeding month, as per the SEBI provided format.
NEW QUESTION # 163
For a client availing the Margin Trading Facility (MTF) to purchase Group 1 equity shares that are NOT available for trading in the F&O segment, what is the applicable initial margin requirement that the stock broker must collect?
- A. VaR Margin + Extreme Loss Margin (ELM)
- B. Span Margin + Exposure Margin
- C. VaR Margin + 3 times applicable Extreme Loss Margin
- D. 40% of the trade value irrespective ofVaR and ELM
- E. VaR Margin + 5 times applicable Extreme Loss Margin
Answer: E
Explanation:
For Group 1 stocks other than F&O stocks and Units of Equity ETF, the applicable margin for Margin Trading Facility is VaR + 5 times of applicable Extreme Loss Margin. For Group 1 stocks available in F&O, it is VaR + 3 times ELM.
NEW QUESTION # 164
Which of the following statements accurately describe the application of the 'Close Out' procedure by the Clearing Corporation? (Select all that apply)
- A. Delivery shortages in securities undergoing corporate action are directly closed out.
- B. Close out is conducted if an auction for short delivery finds no sellers.
- C. The close out price is strictly fixed at the closing price of the trade day for all scenarios.
- D. Securities under 'Trade for Trade' category are subject to direct close out without an auction.
- E. Any surplus proceeds from a close out are credited to the defaulting party's settlement account.
Answer: A,B,D
Explanation:
Option A is correct: Close out happens if auction finds no sellers. Option B is correct: Securities in trade for trade are directly closed out. Option D is correct: Securities under corporate action are directly closed out. Option C is incorrect because surplus is credited to Core SGF. Option E is incorrect because the price formula involves highest price or 20% mark-up.
NEW QUESTION # 165
In the context of the operations of a Depository Participant (DP), what is identified as the 'main activity' pursuant to the trading activity of an investor?
- A. Settlement and transfer of securities from one beneficiary account to another
- B. Dematerialization of physical securities
- C. Pledging of dematerialized securities
- D. Receiving non-cash corporate benefits like bonus shares
- E. Freezing of the demat account for debits or credits
Answer: A
Explanation:
The main activity of the DP is to open a demat account for an investor. The main activity being the settlement and transfer of securities from one beneficiary account to another pursuant a trading activity of an investor.
NEW QUESTION # 166
Regarding the netting of settlement obligations for a member trading in both T+1 and T+0 cycles, which of the following statements is operationally correct?
- A. There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycles.
- B. Netting is permitted only for funds, while securities obligations are kept separate.
- C. Netting is allowed only if the member opts for the 'Unified Settlement' facility provided by the Clearing Corporation.
- D. Securities delivered in T+0 pay-out can be immediately netted against T+1 pay-in obligations for the same day.
- E. Obligations are netted across both cycles to reduce liquidity stress.
Answer: A
Explanation:
The operational guidelines for the T+0 rolling settlement cycle explicitly state: 'There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycle.'
NEW QUESTION # 167
Select the correct combination of statements regarding the expiry cycle and settlement of Long Dated Index Options and Equity Index Futures in the Indian Securities Market.
- A. Statement I: All Index Futures are physically settled. Statement II: Long dated options expire on the first Thursday of the quarter.
- B. Statement I: Index Futures are physically settled. Statement II: Long dated options have a 3-year expiry cycle.
- C. Statement I: All Index Futures are cash settled. Statement II: Long dated options are available up to a 5-year expiry cycle with quarterly and half-yearly expiries.
- D. Statement I: Index Futures expire on the last Friday of the month. Statement II: Long dated options follow only a monthly expiry cycle.
- E. Statement I: Index Futures are cash settled. Statement II: Long dated options have a maximum expiry of 12 months.
Answer: C
Explanation:
The source states: 'All Index future and option contracts are cash settled.' Regarding expiry cycles: 'Monthly index contracts generally have 3-month expiry cycle except for the long dated options contracts which are available up to 5-year expiry cycle with quarterly expiries (March, June, Sept & Dec cycle) and half yearly expiries (Jun, Dec cycle).'
NEW QUESTION # 168
......
NISM-Series-VII Practice Test Give You First Time Success with 100% Money Back Guarantee!: https://troytec.itpassleader.com/NISM/NISM-Series-VII-dumps-pass-exam.html