NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

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TEST DETAILS The SECURITIES INTERMEDIARIES COMPLIANCE ( NON FUND ) CERTIFICATION EXAM is a 100 mark
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NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

LAST DAY REVISION EXAM 1

Question 1

(a)
(b)
(c)
(d)

Question 2
(a)
(b)
(c)
(d)

The Securities Appellate Tribunal - SAT shall not be bound by the

procedure laid down by the Code of Civil Procedure, 1908, but shall be
guided by the principles of natural justice - this provision is as per
_____________.
Contract Act
SEBI Act
Companies Act
PMLA

Which bank of India has the responsibility of administering the

monetary policy?
State Bank of India
Central Bank of India
Reserve Bank of India
Bank of India

Correct Answer 1

SEBI Act

Correct Answer 2

Reserve Bank of India

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 3
(a)
(b)
(c)
(d)

__________ allows the borrowers to lock into interest rates.

Forward Rate agreements
Interest Rate swaps
Global Depository Receipts
Both 1 and 2

Question 4

As per SEBI (Delisting of Equity Shares) Regulations, the public

shareholders can participate in the offer and such offer shall remain open
for a minimum period of _____ working days and a maximum period of
_____ working days.

(a)
(b)
(c)
(d)

2, 7
3, 5
7, 9
4,7

Correct Answer 3

Both 1 and 2

Correct Answer 4

3, 5

Answer
Explanation

The offer shall remain open for a minimum period of 3 working days and a
maximum period of 5 working days, during which the public shareholders
have to tender their bids.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 5

(a)
(b)

Question 6
(a)
(b)
(c)
(d)

SEBI Act states that no person shall sponsor or cause to be sponsored or

carry on or caused to be carried on any venture capital funds or
collective investment schemes including mutual funds if the same does
not obtain a certificate of registration from the SEBI - True or False ?
TRUE
FALSE

Under the Code of Conduct, SEBI prescribes Bankers to an Issue against

their participation in ____________.
Price rigging or manipulation
Creation of false market
Passing of unpublished price sensitive information
All of the above

Correct Answer 5

TRUE

Correct Answer 6

All of the above

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 7

(a)
(b)
(c)
(d)

Question 8

(a)
(b)
(c)
(d)

The Securities and Exchange Board of India (Prohibition of Fraudulent

and Unfair Trade Practices relating to Securities Market) Regulations,
2003 prohibits _________ trade practices in securities.
manipulative
unfair
fraudulent
all of the above

The Debenture Trustees shall communicate to the debenture holders on

____________ basis regarding the compliance of the terms of the issue by
the body corporate, defaults etc and action taken thereof.
monthly
quarterly
half yearly
annual

Correct Answer 7

all of the above

Correct Answer 8

half yearly

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 9

(a)
(b)
(c)
(d)

Question 10
(a)
(b)
(c)
(d)

Correct Answer 9
Answer
Explanation

Correct Answer 10
Answer
Explanation

As per SEBI (Intermediaries) Regulations, if any rules are violated, the

concerned authority, after considering the representations, can
recommend which of the following action(s) Cancellation of certificate of registration
Suspension of certificate of registration for a specified period
Debarring a branch or an office of the noticee from carrying out activities for
the specified period
All of the above

A Depository Participant should redress the grievances of the investors

within _______ days of the receipt of complaint.
15
20
30
45

All of the above

Any of the following actions can be recommended (i) Suspension of certificate of registration for a specified period;
(ii) Cancellation of certificate of registration;
(iii) Prohibiting the noticee to take up any new assignment or contract or
launch a new scheme for the period specified in the order;
(iv) Debarring a principal officer of the noticee from being employed or
associated with any registered intermediary or other registered person for the
period specified in the order;
(v) Debarring a branch or an office of the noticee from carrying out activities
for the specified period;
(vi) Warning the noticee

30
Depository Participant should redress the grievances of the investors within
30 days of the re-ceipt of complaint and keep the depository informed about
the number and nature of grievances redressed by it and number of grievances
pending before it.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 11

(a)
(b)
(c)
(d)

Question 12

(a)
(b)

Correct Answer 11
Answer
Explanation

Correct Answer 12
Answer
Explanation

As per the Code of Conduct for Prevention of Insider Trading, a

Compliance office is responsible for ______________ under the overall
supervision of the partners / proprietors.
monitoring of trades and the implementation of the code of conduct
pre-clearing of all designated employees and their dependants trades
both 1 and 2
none of the above

The restrictions on communication under insider trading do not include

communications under ordinary course of law. State whether True or
False?
FALSE
TRUE

both 1 and 2
As per the SEBI Act, an organisation / firm needs to appoint a compliance
officer who is respon-sible for setting forth policies and procedures and
monitoring adherence to the rules for the preservation of Price Sensitive
Information, pre-clearing of all designated employees and their dependants
trades, monitoring of trades and the implementation of the code of conduct
under the overall supervision of the partners / proprietors.
TRUE
The restrictions do not apply to any communication required in the ordinary
course of business or under any law.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 13

(a)
(b)
(c)
(d)

Question 14

(a)
(b)
(c)
(d)

____________ is defined as any person who is, or was, connected with a

company or is deemed to have been connected with the company and
who is reasonably expected to have access to unpublished price sensitive
information in respect of securities of the company
Stock Broker
Custodian
Insider
Depository Participant

As per the Prevention of Money Laundering Act, whoever commits the

offence of money-laundering shall be liable to fine which may extend to
Rs. _____ in addition to imprisonment.
Rs 10 lakhs
Rs 25 Lakhs
Rs 5 lakhs
Rs 1 lakhs

Correct Answer 13

Insider

Correct Answer 14

Rs 5 lakhs

Answer
Explanation

Whoever commits the offence of money-laundering shall be punishable with

rigorous imprisonment for a term which shall not be less than 3 years but
which may extend to 7 years and shall also be liable to fine which may extend
to Rs. 5 lakhs.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 15

(a)
(b)
(c)
(d)

As per SEBI (Stock Brokers and Sub Brokers) Regulations, what type of
penalty can be imposed on a stock broker if he fails to pay the penalties
imposed by an adjudicating officer ?
Monetary penalties
prosecution and imprinsonment
both monetary penalties and imprinsonment
None of the above

Question 16
(a)
(b)
(c)
(d)

Currency Derivative excludes __________.

Interest Swaps
Futures
Swaps
Options

Correct Answer 15

both monetary penalties and imprinsonment

Correct Answer 16

Interest Swaps

Answer
Explanation

Currency Derivatives are contracts between buyers and sellers, whose values
are to be derived from the underlying assets, i.e. the currency amounts.
These are risk management tools in the forex and money markets. These may
be options or futures or swaps

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 17
(a)
(b)
(c)
(d)

Question 18

(a)
(b)
(c)
(d)

Correct Answer 17
Answer
Explanation

Correct Answer 18

As per the SEBI (Underwriters) Regulations, the capital adequacy

requirement to become an underwriter should be _______.
total networth of Rs 20 lakhs
total networth of Rs 50 lakhs
total assets of Rs 20 lakhs
total assets of Rs 50 lakhs

As per the SEBI ((Issue of Capital and Disclosure Requirements - ICDR)

regulations, a Merchant Banker has to monitor which of the foll
procedures post the issue.
the flow of application from collecting bank branches
processing of the applications including the application form for ASBA
dispatch of security certificates and re-fund orders are completed and
securities are listed.
All of the above

total networth of Rs 20 lakhs\

The capital adequacy requirement to become an underwriter should not be
less than the networth of Rs. 20 lakh.

All of the above

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 19

(a)
(b)

Question 20

(a)
(b)
(c)
(d)

The debenture trustee shall comply with the award of Ombudsman

passed under the Securities and Exchange Board of India (Ombudsman)
Regulations, 2003. State whether True or False?
TRUE
FALSE

As per the SEBI (Buyback of Securities) Regulations, the Merchant

Banker has to send the final report to SEBI within _____ days from the
date of closure of the buy-back offer.
10
15
25
30

Correct Answer 19

TRUE

Correct Answer 20

15

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 21
(a)
(b)
(c)
(d)

A merchant banker provide service(s) related to ______.

Underwriting
Mergers and Aquisitions
Issue of securities of a company
All of the above

Question 22

A Debenture Trustee has forgotten to inform SEBI of an action taken by

some other regulator for non-compliance on him. Is it an offence as per
the code of conduct of SEBI (Debenture Trustees) Regulations ?

(a)
(b)

Yes
No

Correct Answer 21

All of the above

Correct Answer 22

Yes

Answer
Explanation

As per the Code of Conduct for the Debenture Trustees, the Debenture
Trustee has to ensure that SEBI is promptly informed about any action, legal
proceeding, etc., initiated against it in respect of any material breach or noncompliance by it, of any law, rules, regulations, directions of SEBI or of any
other regulatory body.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 23

(a)
(b)

Question 24

(a)
(b)
(c)
(d)

Correct Answer 23
Answer
Explanation

Correct Answer 24
Answer
Explanation

The SEBI (Prohibition of Insider Trading) Regulations, 1992 seek to

govern the conduct of the person(s), defined as 'Investor', in respect of
securities of a company listed on a stock exchange - State True or False ?
TRUE
FALSE

The Lead Merchant Banker carries out which of the following activities :
1 - Capital structuring and formalities such as compo-sition of debt and
equity, type of instruments, etc 2 - Drafting and design of the offer
document 3 - Processing Refunds 4 - Obtaining Shareholders resolutions
for the issue
1 and 3
3 and 4
1 and 2
2 and 4

FALSE
The SEBI (Prohibition of Insider Trading) Regulations, 1992 seek to govern
the conduct of the person(s), defined as INSIDER, in respect of securities of
a company listed on a stock exchange.
1 and 2
The Lead Manager is not involved in obtaining shareholders resolution and
the Bankers manage the refunds etc.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 25

(a)
(b)
(c)
(d)

When any loss is caused to the beneficial owner due to negligence of the
depository or depository participant, the depository shall indemnify
the____________.
Stock Broker
Beneficial Owner
Depository Participant
None of the above

Question 26

As per SEBI Code of Conduct for Sub-Brokers, a sub broker can give a
recommendation to his clients when _______________.

(a)
(b)

he has got it verified from his broker

he has reasonable grounds for believing that the recommendations is suitable
for such a client
he has entered into an legal agreement with his client which absolves him of
any legal problems in case the client suffers losses
all of the above

(c)
(d)

Correct Answer 25

Beneficial Owner

Correct Answer 26

he has reasonable grounds for believing that the recommendations is suitable

for such a client

Answer
Explanation

A sub-broker shall not make a recommendation to any client who might be

expected to rely thereon to acquire, dispose of, retain any securities unless he
has rea-sonable grounds for believing that the recommendations is suitable for
such a client upon the basis of the facts.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 27
(a)
(b)
(c)
(d)

Question 28

(a)
(b)
(c)
(d)

Correct Answer 27
Answer
Explanation

Correct Answer 28
Answer
Explanation

A sub-broker shall enter into a tripartite agreement with __________

before he commences dealing in securities.
stock broker and SEBI
client and Stock Exchange
client and the main stock broker
SEBI and Stock Exchange

The responsibility of administering the Partnership Act, 1932, the

Companies Act, 1951 and the Societies Registration Act , 1980 is vested
with _________.
FMC
SEBI
DEA
MCA

client and the main stock broker

As per the Code of Conduct for Sub-Brokers - A sub-broker shall enter into a
tripartite agreement with his client and the main stock broker indicating the
rights and obligations of the stock broker, sub-broker and such client of the
stock broker.
MCA
The Ministry of Corporate Affairs (MCA) is mainly concerned with the
administration of the Companies Act, 1956 and other allied acts, rules and
regulations pertaining to the corporate sector.
Itis also vested with the responsibility of administering the Partnership Act,
1932, the Companies (Donations to National Funds) Act, 1951 and Societies
Registration Act, 1980.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 29

(a)
(b)
(c)
(d)

Question 30

(a)
(b)
(c)
(d)

Where any intermediary fails to comply with the conditions of

registration or contravenes any of the provisions of the securities laws,
the designated member can pass a order against the intermediary. Who
can become a designated member ?
Chairman of SEBI
Whole time member - SEBI
both 1 and 2
None of the above

As per the Depositories Act, the penalty for failure to maintain books of
account or records is Rs.1 lakh for each day of default or Rs ______,
which ever is less.
50 lakhs
1 crore
2 crores
5 crores

Correct Answer 29

both 1 and 2

Correct Answer 30

1 crore

Answer
Explanation

Section 19A of the Depositories Act lays down the penalties to be imposed
for failure to maintain books of account or records Rs.1 crore or Rs.1 lakh
for each day of default, whichever is less.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 31
(a)
(b)
(c)
(d)

Question 32
(a)
(b)
(c)
(d)

All of the following are functions of SEBI, under SEBI Act of 1992,
except _________ .
Prohibiting insider trading of securities
Promoting and regulating self regulatory organizations
Regulating the business in other securities markets but not in stock exchange
Regulating substantial acquisition of shares and take over of companies

Under the Prevention of Money Laundering Act 2002 (PMLA), Banks

and Financial Institution should ___________.
maintain a record of all transactions
verify and maintain the records of the identity of all its clients
Both 1 and 2
None of the above

Correct Answer 31

Regulating the business in other securities markets but not in stock exchange

Correct Answer 32

Both 1 and 2

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 33
(a)
(b)
(c)
(d)

Question 34
(a)
(b)
(c)
(d)

As per the SEBI (Credit Rating Agencies) Regulations, the certificate of

registration as credit rating agency is valid for a period of _____ years.
2
3
5
7

Securities which are held for less than 12 months before sale are
considered ___________ investment as per Income Tax Act.
Long Term
Medium Term
Short Term
Day Trading

Correct Answer 33

Correct Answer 34

Short Term

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 35
(a)
(b)
(c)
(d)

Question 36

(a)
(b)
(c)
(d)

Every Depository Participant should put in place an adequate

mechanism for _____the internal accounting controls.
Reviewing
Monitoring
Evaluating
All of the above

As per the SEBI (Prohibition of Insider Trading) Regulations, all

__________of the firm who intend to deal in the securities of the client
company shall pre-clear the transactions as per the pre-dealing
procedure as prescribed in the regulations.
Directors
Officers
Designated Employees
All of the above

Correct Answer 35

All of the above

Correct Answer 36

All of the above

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 37
(a)
(b)
(c)
(d)

Question 38

(a)
(b)
(c)
(d)

Correct Answer 37
Answer
Explanation

Correct Answer 38

Which of the following is NOT an activity performed by the bankers to

an issue?
Payment of dividend or interest warrant
Collection of securities transaction tax
Acceptance of application monies
Acceptance of call monies

As per the SEBI (KYC Registration Agency-KRA) Regulations, SEBI

shall grant an initial registration to the KRA which shall be valid for a
period of _____ years from the initial date of its issue to the applicant.
3
4
5
6

Collection of securities transaction tax

Securities Transaction Tax (STT) is collected by the Stock Brokers.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 39
(a)
(b)

Question 40
(a)
(b)

Correct Answer 39
Answer
Explanation

Correct Answer 40

The employees of Custodian cannot be engaged in any other activity

carried on by the Custodian - State True or False ?
TRUE
FALSE

Is the Stock broker required to pre-intimate SEBI about shifting the

location where it keeps its books of accounts. State Yes or No?
Yes
No

TRUE
In cases where the custodian of securities is carrying on any activity besides
that of acting as custodian of securities, then, he should ensure that the
activities relating to his business as custodian of securities is separate and
segregated from all other activities.
Also the officers and employees engaged in providing custodial services shall
not be engaged in any other activity carried on by him.
No

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 41
(a)
(b)
(c)
(d)

Question 42

(a)
(b)

If an Stock Broker is giving an investment advice in a publicly accessible

media, it should necessarily be accompanied by ___________.
disclosure from all the employees of the stock broking firm about their
interest in the recommended stock
disclosure from the person giving the advice about his interest in the
recommended stock
disclosure from the compliance officer of the stock broking firm about their
interest in the recommended stock
All of the above

A sub broker is recommending some shares to his clients irrespective of

the technical and financial aspects of these shares. His commission is
based on the volume these clients do in stock trading. Is this a fraud as
per the rules of SEBI (Prohibition of Fraudulent and Unfair Trade
Practices relating to securities Market) Regulations ?
Yes
No

Correct Answer 41

disclosure from the person giving the advice about his interest in the
recommended stock

Correct Answer 42

Yes

Answer
Explanation

As per SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to

securities Market) Regulations - encouraging the clients by an intermediary to
deal in securities solely with the object of enhancing his brokerage or
commission is a fraud.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 43

(a)
(b)
(c)
(d)

Question 44
(a)
(b)
(c)
(d)

Correct Answer 43
Answer
Explanation

Correct Answer 44

Under the Securities Contracts (Regulation) Rules, 1957 - every member

of a recognized stock exchange is required to maintain and preserve the
journals for ______ years.
1
2
3
5

Financial Markets includes _________ .

Stock / Equity Markets
Currency Markets
Bond / Debt Markets
All of the Above

5
Under Rule 15(1) every member of a recognized stock exchange is required to
maintain and preserve the following books of account and documents for a
period of 5 years:
Register of transactions (Sauda book).
Clients ledger.
General ledger.
Journals.
Cash book.
Bank pass-book.
Documents register showing full particulars of shares and securities received
and delivered.

All of the Above

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 45
(a)
(b)
(c)
(d)

Question 46

(a)
(b)
(c)
(d)

Correct Answer 45
Answer
Explanation

Correct Answer 46

As per the SEBI (Credit Rating Agencies) Regulations, the certificate

renewal fee of a credit rating agency is _______.
Rs 5 lakhs
Rs 10 lakhs
Rs 25 lakhs
Rs 50 lakhs

According to the SEBI (Issue of Capital and Disclosure Requirements)

Regulations, the minimum subscription to be received in an issue shall
not be less than ________ of the offer through offer document.
75%
80%
90%
95%

Rs 10 lakhs
The Credit Rating Agency on being granted the registration certificate shall
pay to SEBI the registration fee of Rs. 20 lakh.
Application for renewal can be made to SEBI three months prior to the expiry
of the certificate accompanied with the renewal fees which is Rs. 10 lakh. The
period of validity of the certificate granted to the Credit Rating Agency is
three years
90%

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 47

(a)
(b)
(c)
(d)

Question 48
(a)
(b)
(c)
(d)

As per the Depositories Act, the penalty for failure to redress

investors grievances after having been called upon to do so by SEBI
within the specified time period is Rs ________ or Rs.1 lakh for each day
of default, whichever is less.
One Crore
Two Crores
Five Crores
Ten Crores

__________ includes all offences under Part A and Part B (without the
threshold) that has cross border implications.
Part A of the Prevention of Money-Laundering Act
Part B of the Prevention of Money-Laundering Act
Part C of the Prevention of Money-Laundering Act
None of the above

Correct Answer 47

One Crore

Correct Answer 48

Part C of the Prevention of Money-Laundering Act

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 49
(a)
(b)

Question 50

All the stock exchanges in India have same bye laws and these have to be
approved by SEBI - True or False ?
TRUE
FALSE

Every debenture trustee shall pay a renewal fee of Rs. 5 lakh every three
years within ______ days of being intimated by SEBI.

(a)
(b)
(c)
(d)

5 days
15 days
30 days
45 days

Correct Answer 49

FALSE

Answer
Explanation

Correct Answer 50
Answer
Explanation

The Stock Exchange bye laws lay down rules regarding the admission of
trading members, listing requirements, fees, suspension of admission etc etc
and differ from exchange to exchange but these have to be in conformity with
the provisions of the SC(R)A, 1956, SC(R)R, 1957 and the SEBI Act, 1992.
Such bye laws framed by the stock exchanges need to be approved by the
SEBI.
15 days
Every debenture trustee shall pay a sum of Rs. 10 lakhs as registration fees at
the time of the grant of certificate by SEBI and shall pay renewal fee of Rs. 5
lakh every three years from the fourth year from the date of initial
registration.
The renewal fee shall be paid within 15 days of being intimated by SEBI.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 51

(a)
(b)

Question 52

As per the Securities Contract (Regulation) Act, the Central Government

/ SEBI has the powers to prescribe admission criteria and qualifications
for members of a Stock Exchange - True or False ?
TRUE
FALSE

The Stock Brokers are required to adhere to a code of conduct apart

from the rules and regulations - True and False ?

(a)
(b)

TRUE
FALSE

Correct Answer 51

TRUE

Answer
Explanation

Correct Answer 52
Answer
Explanation

SC(R)A covers around 31 Sections. Sections 3 to 12 are specifically related to

various aspects of stock exchange recognition. The Central Government
(Powers are exercisable by SEBI also) has the powers to prescribe admission
criteria and qualifications for members.
TRUE
A stock broker or its sub broker needs to adhere to a particular code of
conduct as prescribed in the schedule II of the regulations.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 53

(a)
(b)
(c)
(d)

Question 54
(a)
(b)
(c)
(d)

Correct Answer 53
Answer
Explanation

Correct Answer 54
Answer
Explanation

Which Act currently deals with matters relating to foreign exchange,

external trade and payments for promoting the orderly development and
maintenance of foreign exchange market in India.
FERA
FEMA
RBI Act
MCX

The renewal fee to keep the registration in force as credit rating agency is
____.
Rs 5 lakh
Rs 10 lakh
Rs 20 lakh
Rs 25 lakh

FEMA
The Foreign Exchange Management Act (FEMA), 1999 deals with matters
relating to foreign exchange etc. This act replaced the old Foreign Exchange
Regulation Act (FERA).
Rs 10 lakh
The Credit Rating Agency on being granted the registration certificate shall
pay to SEBI the registration fee of Rs. 20 lakh.
Application for renewal can be made to SEBI three months prior to the expiry
of the certificate accompanied with the renewal fees and the renewal fee is Rs.
10 lakh.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 55

(a)
(b)
(c)
(d)

Question 56

(a)
(b)

As per the SEBI (Certification of Associated Persons in Securities Markets)

Regulations, 2007, a certificate is valid for a period of ______ year(s) from
the date of grant of certificate or revalidation as the case may be.
1
2
3
5

A relationship manager of a stockbroking firm has advised his clients to

buy some stocks without doing proper research as his commission is
based on the brokerage he generates. Is this a fraud as per SEBI rules ?
Yes
No

Correct Answer 55

Correct Answer 56

Yes

Answer
Explanation

Dealing in securities shall be deemed to be a fraudulent or an unfair trade

practice if it involves encouraging the clients by an intermediary to deal in
securities solely with the object of enhancing his brokerage or commission.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 57

(a)
(b)
(c)
(d)

Question 58

Any person connected with the proceeds of crime and projecting it as

____________ shall be guilty of the offence of money-laundering as per
the Prevention of Money-Laundering Act, 2002.
untainted property
stolen property
illegal property
embezzled property

Failure to exercise due skill, care and diligence by a Stock Broker will
lead to __________ as per the provisions of SEBI (Stock Brokers and Sub
Brokers) Regulations.

(a)
(b)
(c)
(d)

Prosecution
Monetary Penalty
Both 1 and 2
None of the Above

Correct Answer 57

untainted property

Answer
Explanation

Correct Answer 58
Answer
Explanation

As per the Prevention of Money-Laundering Act, 2002 (PMLA) - Who-ever

directly or indirectly attempts to indulge, or knowingly assists or knowingly is
a party or is actually involved, in any process or activity connected with the
proceeds of crime and projecting it as untainted property shall be guilty of the
offence of money-laundering.
Monetary Penalty
Failure to exercise due skill, care and diligence by a Stock Broker will lead
only to Monetary Penalty.
For violations like Manipulations and Insider Trading etc, the penalty can be
both Monetary and Prosecution.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 59

(a)
(b)
(c)
(d)

Question 60
(a)
(b)
(c)
(d)

Correct Answer 59
Answer
Explanation

Correct Answer 60
Answer
Explanation

________________ supervises three professional bodies - the Institute of

Chartered Accountants of India (ICAI), the Institute of Company
Secretaries of India (ICSI) and the Institute of Cost and Works
Accountants of India (ICWAI)
MCA
SEBI
FM
RBI

Under ___________, offences are considered as money laundering if the

total value of such offences is Rs 30 lakh or more.
Part A of PMLA
Part B of PMLA
Part C of PMLA
None of the above

MCA
MCA - Ministry of Corporate Affairs

Part B of PMLA
The offences under Prevention of Money-Laundering Act are classified under
Part A, Part B and Part C of the Schedule.
Under Part A, offences include counterfeiting currency notes.
Under Part B, offences are considered as money laundering if the total value
of such offences is Rs 30 lakh or more.
Part C includes all offences under Part A and Part B (without the threshold)
that has cross-border implications.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 61
(a)
(b)
(c)
(d)

Question 62

(a)
(b)
(c)
(d)

Correct Answer 61
Answer
Explanation

Correct Answer 62

The 'Public Areas' in an organisation deal with advice on _________.

Sales
Marketing
Investments
All of the above

As per the SEBI (Stock Brokers and Sub Brokers) Regulations, a subbroker should submit to the SEBI or to _________ such books, special
returns, correspondence, documents and papers as may be required.
Trading Member
Company Law Board
Income Tax
stock exchange with which it is registered

All of the above

As per SEBI (Prohibition of Insider Trading) Regulations, to prevent the
misuse of confidential information the organisation shall adopt a Chinese
Wall policy which separates those areas of the organisation which routinely
have access to confidential information, considered insider areas from those
areas which deal with sale/ marketing/investment advice considered as
Public Areas.
stock exchange with which it is registered

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 63
(a)
(b)
(c)
(d)

Question 64
(a)

(b)
(c)
(d)

Who amongst the following collates data on subscriptions regarding

primary issuances?
Registrars
Banks
Venture Capital Funds
Custodians

As per the Code of Conduct for Bankers to an Issue, the banker to an

issue shall _________.
ensure that where a complaint is not remedied promptly, the investor is
advised of any further steps which may be available to the investor under the
regulatory system.
ensure that inquiries from investors are adequately dealt with.
ensure that grievances of investors are redressed in a timely and appropriate
manner
all of the above

Correct Answer 63

Registrars

Correct Answer 64

all of the above

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 65
(a)
(b)
(c)
(d)

Question 66

(a)
(b)

Assistance in underwriting tie up in primary issues is done by _______.

Depositories
Transfer Agents
Registrars
Merchant Bankers

Where any intermediary fails to comply with any of the conditions of

registration a show cause notice is issued to him as per the SEBI
(Intermediaries) Regulations. Can the designated authority, after giving
an hearing to the noticee, just warn him to be more careful in future ?
Yes or No ?
Yes
No

Correct Answer 65

Merchant Bankers

Correct Answer 66

Yes

Answer
Explanation

The designated authority can recommend any of the following actions:

(i) Suspension of certificate of registration for a specified period;
(ii) Cancellation of certificate of registration;
(iii) Prohibiting the noticee to take up any new assignment or contract
(iv) Debarring a principal officer
(v) Debarring a branch or an office of the noticee from carrying out activities
for the specified period;
(vi) Warning the noticee.

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 67
(a)
(b)
(c)
(d)

Question 68
(a)
(b)
(c)
(d)

Correct Answer 67
Answer
Explanation

Correct Answer 68

The post issue activities of a lead merchant banker includes holding conferences of stockbrokers and investors to market the issue
processing the rematerialistion requests
finalisation of the basis of allotment
all of the above

In case of Stock Brokers, the In-Person Verification (IPV) can be carried

out by __________
Authorised Person
Sub Brokers
Both 1 and 2
None of the above

finalisation of the basis of allotment

Holding of conferences is a pre issue function and processing of
rematerialisation is a function of the Depository / Registrar.

Both 1 and 2

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Question 69

If an Intermediary is debarred or suspended, the intermediary shall -

(a)

allow its clients to withdraw or transfer their securities or funds held in its
custody, charging the clients for such transactions

(b)

allow its clients to withdraw or transfer their securities or funds held in its
custody, without any additional cost to such client

(c)

undertake any new assignment during the period of such debarment or

suspension.
None of the above

(d)

Question 70

(a)
(b)
(c)
(d)

The RBI's main banking functions are : 1. Issue good quality currency
notes and coins 2. Act as a banker to the Government and manages
issuances of Central and State Government Securities. 3. Act as a banker
to the banks by maintaining the banking accounts of all scheduled banks.
4. Formulate fiscal policies
1&2
2&3
3&4
1&4

Correct Answer 69

allow its clients to withdraw or transfer their securities or funds held in its
custody, without any additional cost to such client

Correct Answer 70

2&3

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1

Practice Question Banks also available for :

NISM
NISM Series I: Currency Derivatives Certification Exam
NISM Series V A: Mutual Fund Distributors Certification Exam
NISM Series VI: NISM Series VI - Depository Operations Certification Exam
NISM Series VII: Securities Operations and Risk Management
NISM Series VII: Equity Derivatives Certification Exam
NISM Series III A: Securities Intermediaries Compliance certification Exam
NISM Series X A : Investment Adviser (Level 1) Certification Exam
NISM Series X B: Investment Adviser (Level 2) Certification Exam

NCFM
NCFM Financial Markets: A Beginners Module
NCFM Capital Market (Dealers) Module
NCFM Derivative Market (Dealers) Module

BSE
Certificate on Security Market (BCSM)

NISM SERIES III A SECURITIES INTERMEDIARIES

COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 1