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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
LAST DAY REVISION EXAM 2
Question 1 Department of Financial Services administers government policies relating
to ____________.
(a) Public sector banks
(b) Term-lending financial institutions
(c) Life insurance and general insurance
(d) All of the above
Question 2 As per SEBI (Issue of Capital and Disclosure Requirements - ICDR)
Regulations, a copy of the resolution passed by the board of directors of
the issuer for allotting specified securities to promoters towards amount
received against promoters contribution, before opening of the issuehas to be submitted to _______ .
(a) SEBI
(b) Stock Exchange
(c) Merchant Banker
(d) AMFI
Correct Answer 1 All of the above
Correct Answer 2 SEBI
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 3 Can SEBI prohibit any company from issuing prospectus, any offer
document, or advertisement soliciting money from the public for the issue
of securities?
(a) Yes
(b) No
Question 4 As per the SEBI (Prohibition of Fraudulent and Unfair Trade Practices
relating to Securities Market) Regulations, dealing in a security which is
not intended to effect a transfer of beneficial ownership but to serve only
as a device to ________ in the price of such security for wrongful gain or
avoidance of loss.
(a) inflate
(b) depress
(c) cause fluctuations
(d) all of the above
Correct Answer 3 Yes
Answer
Explanation
The Section 11A of the SEBI Act states that without any prejudice to theprovisions of the Companies Act 1956, SEBI may for the protection ofinvestors prohibit any company from issuing prospectus, any offer document,or advertisement soliciting money from the public for the issue of securities.
Correct Answer 4 all of the above
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 5 As per the SEBI (Custodian of Securities) Regulations, an applicant for
the Custodian of Securities should have a networth of minimum of
(a) Rs 50 lakhs
(b) Rs 5 crores
(c) Rs 25 crores
(d) Rs 50 crores
Question 6 As per the SEBI (Custodian of Securities) Regulations - every certificate
granted to the applicant as a Custodian of Securities shall be valid for a
period of ______ years from the date of registration or its renewal.
(a) 3
(b) 5
(c) 7
(d) 10
Correct Answer 5 Rs 50 crores
Correct Answer 6 3
AnswerExplanation
Every certificate grated to the applicant as a Custodian of Securities shall bevalid for a period of 3 years from the date of registration or its renewal.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 7 To effectively implement the KYC guidelines, SEBI notified the ________.
(a) SEBI (KYC Registration Agency) Regulations, 2011
(b) SEBI (Self Regulatory Organization) Regulations, 2004
(c) PMLA, 2002
(d) None of the above
Question 8 According to the SEBI (Stock Brokers and Sub Brokers) Regulations, the
compliance officer shall immediately and independently report to SEBI
any non-compliance observed by him. True or False ?
(a) TRUE
(b) FALSE
Correct Answer 7 SEBI (KYC Registration Agency) Regulations, 2011
Correct Answer 8 TRUE
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 9 As per the SEBI (Prohibition of Fraudulent and Unfair Trade Prac-tices
relating to securities Market) Regulations, in case of fraud, SEBI can
________ the proceeds or securities in respect of any transaction which is
in violation of the SEBI regulations.
(a) Impound
(b) Retain(c) Both 1 and 2
(d) SEBI does not have any such authority.
Question 10 As per SEBI (Intermediaries) Regulations, 2008, what is the next step after
receiving the recommendations of the designated authority who is
appointed to enquire and recommend action in case of violation of rules of
the securities market ?
(a) Gives warning to the intermediary dismissing the recommendations(b) Issues the recommended action without hearing the noticee
(c) issues a show cause notice to the intermediary as to why the recommendedaction should not be taken
(d) none of the above
Correct Answer 9 Both 1 and 2
Correct Answer 10 issues a show cause notice to the intermediary as to why the recommendedaction should not be taken
Answer
Explanation
The designated authority shall, if there are reasonable grounds to do so, issue a
show-cause notice to the concerned person requiring it to show cause as to whythe certificate of registration granted to it, should not be suspended or cancelledor why any other action provided in the regulations should not be taken.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 11 As per SEBI (Prohibition of Fraudulent and Unfair Trade Practices
relating to securities Market) Regulations, SEBI can, both impound and
retain the proceeds or securities in respect of any transaction which is in
violation or prima facie in violation of these regulations - True or False ?
(a) FALSE
(b) TRUE
Question 12 Every member of a recognized stock exchange has to maintain and
preserve the Counterfoils or duplicates of contract notes issued to clients
for a period of _____ years
(a) 2
(b) 5
(c) 7
(d) 10
Correct Answer 11 TRUE
Correct Answer 12 2
Answer
Explanation
Every member of a recognized stock exchange to maintain and preserve the
following documents for a period of 2 years: Members contract books showing details of all contracts entered into by themember with other members of the same exchange or counterfoils or duplicates
of memos of confirmation issued to such other members. Counterfoils or duplicates of contract notes issued to clients. Written consent of clients in respect of contracts entered into as principals.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 13 A debenture trustee shall pay a sum of Rs. _______ as registration fees at
the time of the grant of certificate by SEBI.
(a) Rs 25 lakhs
(b) Rs 15 lakhs
(c) Rs 10 lakhs
(d) Rs 5 lakhs
Question 14 As per the SEBI code of conduct for underwriters, an Underwriter is
responsible for the acts or omissions only of its employees and not of
agents in respect to the conduct of its business. State True or False ?
(a) FALSE
(b) TRUE
Correct Answer 13 Rs 10 lakhs
Answer
Explanation
Every debenture trustee shall pay a sum of Rs. 10 lakhs as registration fees atthe 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.
Correct Answer 14 FALSE
Answer
Explanation
The Underwriter is responsible for the acts or omissions of its employees andagents in respect to the conduct of its business.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 15 The annual fees to keep the registration in force as custodian under the
SEBI (Custodian of Securities) Regulations is ____________.
(a) Rs. 10 lakh or 0.00025% of the assets under custody whichever is higher.
(b) Rs 25 lakh or 0.00025% of the assets under custody whichever is higher.
(c) Rs. 10 lakh or 0.00025% of the assets under custody whichever is lower.
(d) Rs 25 lakh or 0.00025% of the assets under custody whichever is lower.
Question 16 SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to
securities Market) Regulations have been made in exercise of the powers
conferred by __________.
(a) Prevention of Money Laundering Act
(b) Companies Act
(c) Securities Contract ( Regulation ) Act
(d) SEBI Act
Correct Answer 15 Rs. 10 lakh or 0.00025% of the assets under custody whichever is higher.
Answer
Explanation
On being granted the certificate of registration, the Custodian of securities needto pay registra-tion fee of Rs. 15 lakh to SEBI, and an annual fee of Rs. 10 lakhor 0.00025% of the assets under custody of the custodian of securities,whichever is higher.
Correct Answer 16 SEBI Act
Answer
Explanation
The Securities and Exchange Board of India (Prohibition of Fraudulent and
Unfair Trade Practices relating to Securities Market) Regulations, 2003prohibit fraudulent, unfair and manipulative trade practices in securities.These regulations have been made in exercise of the powers conferred bysection 30 of the SEBI Act, 1992.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 17 Fraud includes a willful misrepresentation of truth OR concealment of
material fact, in order that another person may act, to his detriment. State
whether True or False?
(a) FALSE
(b) TRUE
Question 18 _____________ appoints the Registrar of Companies.
(a) SEBI
(b) Central Government
(c) Company Law Board
(d) RBI
Correct Answer 17 TRUE
Correct Answer 18 Central Government
Answer
Explanation
Pursuant to Section 609(1) of the Companies Act, 1956, the CentralGovernment has appointed Registrars at different places to discharge thefunction of registration of companies.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 19 SEBI in the interest of the securities market may direct an intermediary to
refund the money or securities collected from the investors, however no
interest will be paid on it - State True or False ?
(a) TRUE
(b) FALSE
Question 20 ______________ must be maintained by a Stock Broker while conductinghis business.
(a) High level of profits
(b) High level of Integrity
(c) Prominence amongst his clients
(d) All of the above
Correct Answer 19 FALSE
Answer
Explanation
The refund can be with or without interest as per the decision of SEBI.
Correct Answer 20 High level of Integrity
Answer
Explanation
As per the Code of Conduct for Brokers - A stock-broker, must maintain highstandards of integrity, promptitude and fairness in the conduct of all itsbusiness.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 21 The certificate of registration granted as a Underwriter, and its renewal is
valid for a period of _____ from the date of its issue to the applicant.
(a) 2 years
(b) 3 years
(c) 5 years
(d) 7 years
Question 22 For SEBI to consider the application of registration as a credit rating
agency of an entity promoted by a company, the promoter shall have a
continuous networth of minimum __________ for the previous five year.
(a) Rs 1 crore
(b) Rs 10 crores
(c) Rs 50 crores
(d) Rs 100 crores
Correct Answer 21 3 years
Answer
Explanation
The certificate of registration so granted and its renewal is valid for a period of3 years from the date of its issue to the applicant.An underwriter shall apply for renewal of registration three months prior to theexpiry of the period of the certificate along with the appropriate fees as
provided by in the regulations.
Correct Answer 22 Rs 100 crores
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 23 As per SEBI(Debenture Trustees) Regulations, debenture trustee shall
communicate to the debenture holders on _____basis regarding
compliance, defaults, etc. and the action taken regarding it.
(a) Half Yearly
(b) Yearly
(c) Monthly
(d) Every 3 months
Question 24 The Banker to an issue has to submit the collection figures to the Registrar
to the Issue, the lead manager and the body corporate and such figures
should be submitted within ______ working days from the issue closure
date.
(a) seven
(b) three
(c) six
(d) fifteen
Correct Answer 23 Half Yearly
Correct Answer 24 seven
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 25 The capital adequacy requirement to become a Debenture Trustee is
__________ .
(a) Total Assets of Rs 1 crore
(b) Total Assets of Rs 5 crores
(c) Networth of Rs 5 crores
(d) Networth of Rs 1 crore
Question 26 As per the SEBI (Credit Rating Agencies) Regulations, a Credit Rating
Agency on being granted the registration certificate shall pay to SEBI the
registration fee of Rs. ______ lakhs
(a) 5
(b) 10
(c) 20
(d) 25
Correct Answer 25 Networth of Rs 1 crore
Answer
Explanation
As per SEBI (Debenture Trustees) Regulations, capital adequacy requirementshall not be less than the networth of one crore rupees, provided that adebenture trustee holding certificate of registration as on the date ofcommence-ment of the SEBI (Debenture trustees) (Amendment) Regulations,2003 shall fulfil the networth requirements within two years from the date ofsuch commencement.
Correct Answer 26 20
Answer
Explanation
The Credit Rating Agency on being granted the registration certificate shall pay
to SEBI the registra-tion fee of Rs. 20 lakh. Application for renewal can bemade to SEBI three months prior to the expiry of the certificate accompaniedwith the renewal fees. The renewal fee is Rs. 10 lakh.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 27 SEBI in the interest of the securities market may direct an intermediary to
refund the money or securities collected from the investors with or without
interest. State whether True or False?
(a) TRUE
(b) FALSE
Question 28 Is it required to verify the source of funds as well as wealth of PoliticallyExposed Persons ?
(a) Yes
(b) No
Correct Answer 27 TRUE
Correct Answer 28 Yes
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 29 If a Credit Rating Agency has to change the rating defination, it can be
done ____________.
(a) only with the prior permission of SEBI
(b) only with the approvals of its shareholders
(c) only at certain periodic intervals
(d) All of the above
Question 30 A SEBI registered stock broker can become a depository participant
provided the stock broker has a minimum net worth of Rs._____ lakhs
(a) 10
(b) 25
(c) 50
(d) 100
Correct Answer 29 only with the prior permission of SEBI
Answer
Explanation
Rating definition, as well as the structure for a particular rating product, shallnot be changed by a credit rating agency, without prior information to SEBI.
Correct Answer 30 50
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 31 Can SEBI prohibit any company from issuing prospectus, any offer
document, or advertisement soliciting money from the public for the issue
of securities? State Yes or No?
(a) Yes
(b) No
Question 32 Which of the following is not a security as per Securities ContractRegulation Act (SCRA) ?
(a) Derivatives
(b) Bonds
(c) Bullion
(d) Shares
Correct Answer 31 Yes
Answer
Explanation
The Section 11A of the SEBI Act states that without any prejudice to theprovisions of the Companies Act 1956, SEBI may for the protection ofinvestors prohibit any company from issuing prospectus, any offer document,
or advertisement soliciting money from the public for the issue of securities.
Correct Answer 32 Bullion
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 33 Apart from SEBI Regulations, Bankers to an issue shall abide by the
relevant rules and regulations of _______ .
(a) Indian Bank Association
(b) Central Government
(c) RBI
(d) All of the above
Question 34 Post issue activities, generally co-ordinated by Lead Merchant Banker,
include which of the following?
(a) Finalisation of the basis of allotment
(b) Deciding on centres for holding conferences of stock brokers, investors, etc.
(c) Processing rematerialisation requests
(d) All of the above
Correct Answer 33 All of the above
Correct Answer 34 Finalisation of the basis of allotment
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 35 As per SEBI (ICDR) Regulation, only audited and consolidated financial
statements need to be prepared in accordance to GAAP. State whether
True or False.
(a) TRUE
(b) FALSE
Question 36 SEBI was set up under which act ?(a) Competition Act 2002
(b) SEBI Act 1992
(c) Securities Contract (Regulation) Act 1956
(d) Securities Contract (Regulation) Rules 1957
Correct Answer 35 FALSE
Answer
Explanation
In accordance with requirements of the ICDR, the information requiredincludes audited consolidated or unconsolidated financial statements preparedin accordance with Indian GAAP standards.
Correct Answer 36 SEBI Act 1992
Answer
Explanation
The SEBI Act of 1992 was enacted upon to provide for the establishment of a
Board to protect the interests of investors in securities and to promote thedevelopment of, and to regulate, the securities market and for mattersconnected therewith or incidental thereto.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 37 To bring in uniformity in the KYC procedure across intermediaries, the In
Person Verification (IPV) has to be done by which of the foll
intermediaries -
(a) Stock Brokers
(b) KRAs & Depository Participants
(c) Venture Capital Funds and Collective Investment Schemes
(d) All of the above
Question 38 Can a common order be passed in respect of a number of noticees where
the subject matter in question is substantially the same or similar in
nature?
(a) Yes
(b) No
Correct Answer 37 All of the above
Answer
Explanation
To bring in uniformity in the KYC procedure across intermediaries, the IPVrequirements for all the intermediaries have been streamlined by SEBI.Intermediaries registered with SEBI as Stock Brokers, KRAs, DepositoryParticipants, Mutual Funds, Portfolio Managers, Venture Capital Funds and
Collective Investment Schemes need to mandatorily carry out IPV for all theirclients.
Correct Answer 38 Yes
AnswerExplanation As per the SEBI (Intermediaries) Regulations - Action in case of default - TheDesignated member may pass a common order in respect of a number of
notices where the subject matter in question is substantially the same or similarin nature.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 39 A Merchant Banker has to disclose its track record for a period of _______
from the date of listing for each public issue managed by the merchant
banker.
(a) 5 Financial Years
(b) 4 Calendar years
(c) 3 Financial Years
(d) 4 Financial Years
Question 40 A member of a recognised stock exchange can enter into a contract as a
principal with another member who is also a member of a recognised
stock exchange after obtaining his consent - True or False ?
(a) TRUE
(b) FALSE
Correct Answer 39 3 Financial Years
AnswerExplanation As per SEBI, the merchant bankers shall disclose the track record of theperformance of the public issues managed by them.The track record shall be disclosed for a period of three financial years fromthe date of listing for each public issue managed by the merchant banker. Thisinformation should be made available on the website and a reference to the
same should be made in the offer document.
Correct Answer 40 TRUE
Answer
Explanation
Section 15 of SCRA provides that no member of a recognised stock exchangeshall in respect of any securities enter into any contract as a principal with any
person other than a member of a recognised stock exchange, unless he hassecured the consent or authority of such person and discloses in the note,memorandum or agreement of sale or purchase that he is acting as a principal.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 41 The certificate of registration as Underwriter is valid for a period of how
many years ?
(a) 2
(b) 3
(c) 5
(d) 10
Question 42 As per Securities Contracts (Regulation) Rules - SCRR, the trading
members of the stock exchanges are required to maintain the counterfoils
or duplicates of contract notes issued to clients for how many years?
(a) 1
(b) 2
(c) 3
(d) 5
Correct Answer 41 3
Correct Answer 42 2
Answer
Explanation
Rule 15(2) od SCRR requires every member of a recognized stock exchange to
maintain and preserve the following documents for a period of 2 years: Members contractbooks showing details of all contracts entered into by themember with other members of the same exchange or counterfoils or duplicatesof memos of confirmation issued to such other members. Counterfoils or duplicates of contract notes issued to clients. Written consent of clients in respect of contracts entered into as principals.
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 43 As per the SEBI (Underwriters) Regulations - code of conduct, theunderwriters shall not be a party to or instrumental for ____________.
(a) creation of false market
(b) price rigging or manipulation
(c) passing of unpublished price sensitive information in respect of securities
which are listed and proposed to be listed in any stock exchange to any personor intermediary.
(d) All of the above
Question 44 Any person aggrieved by an order of the SEBI may prefer an appeal to the
Securities Appellate Tribunal within a period of 60 days from the date on
which a copy of the order made by SEBI has been received by such person.
True or False ?
(a) TRUE
(b) FALSE
Correct Answer 43 All of the above
Correct Answer 44 FALSE
Answer
Explanation
An appeal shall be filed within a period of 45 days and not 60 days.
(Any person aggrieved by any decision of the Securities Appellate Tribunalmay file an appeal to the Supreme Court within 60 days).
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 45 __________of SEBI act relates to defaults by mutual funds(MFs) andprescribes penalties.
(a) Section 15A
(b) Section 15B
(c) Section 15C
(d) Section 15D
Question 46 In case of buy-back, the company shall ensure that all the securities
bought back are extinguished within ____ days of the last date ofcompletion of buy-back.
(a) 4
(b) 6
(c) 7
(d) 15
Correct Answer 45 Section 15D
Correct Answer 46 7
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 47 As per SEBI (Substantial Acquisition of Shares & Takeovers - SAST)Regulations, within how many days a merchant banker has to make an
open offer before making the public announcement of entering into an
agreement for acquisition of shares or voting rights ?
(a) 4 working days
(b) 7 working days
(c) 15 working days
(d) 30 working days
Question 48 Which of the following come under the scope of compliance ?
(a) Checklists
(b) Compliance's and redressing investor grievances
(c) Minutes of Board Meeting
(d) All of the above
Correct Answer 47 4 working days
Answer
Explanation
The acquirer company is required to appoint a SEBI registered MerchantBanker, as a manager to the open offer before making the publicannouncement.The public announcement shall be made by the merchant banker not later than4 working days of entering into an agreement for acquisition of shares or
voting rights or deciding to acquire shares or voting rights.
Correct Answer 48 Compliance's and redressing investor grievances
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 49 State True or False - The SEBI Act vests SEBI with the power to issue the
certificate of registration to Securities MArket Intermediaries.
(a) TRUE
(b) FALSE
Question 50 Any person aggrieved by any decision or order of the Securities Appellate
Tribunal may file an appeal to the Supreme Court within ______ days
from the date of communication of the decision or order of the SAT to
him.
(a) 30
(b) 60
(c) 75
(d) 90
Correct Answer 49 TRUE
Answer
Explanation
Section 12 of SEBI Act vests SEBI with the power to issue the certificate ofregistration without which no stockbroker, sub-broker, share transfer agent,
banker to an issue, trustee of trust deed, registrar to an issue, merchant banker,underwriter, portfolio manager, investment adviser or such other intermediarywho may be associated with the securities market shall buy, sell or deal insecurities.
Correct Answer 50 60
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NISM SERIES III ASECURITIES INTERMEDIARIES
COMPLIANCE ( NON FUND ) CERTIFICATION V.IMP LAST DAY REVISION EXAM 2
Question 51 The guaranteeing of trades done on an registered securities market is doneby ____________.
(a) Nationalised Banks
(b) Clearing House
(c) Merchant Bankers
(d) The Stock Broker who executes the trade
Question 52 An intermediary cannot sponsor or cause to be sponsored or carry on or
caused to be carried on any venture capital funds or collective investmentschemes including mutual funds if the same does not obtain a certificate of
registration from the SEBI - True or False ?
(a) TRUE
(b) FALSE
Correct Answer 51 Clearing House
Answer
Explanation
Clearing House is the intermediary which performs two important functions:
a) aggregating transactions over a trading period, netting the positions to
determine the liabilities of members and ensures movement of funds andsecurities to meet respective liabilities; andb) guarantee those trades, in the event of default by either buyer or seller.
Correct Answer 52 TRUE
Answer
Explanation
As per the rules of registration of Intermediaries, SEBI can suspend or cancel acertificate of registration after giving the person concerned a reasonableopportunity of presenting his case if he sponsors any venture capital funds orcollective investment schemes including mutual funds if the same does notobtain a certificate of registration from the SEBI.
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Question 53 All the employees, directors etc of the intermediary need to strictly adhere
to the Code of Conduct as prescribed in the SEBI Regulations. State
Whether True or False?
(a) TRUE
(b) FALSE
Question 54 ___________ carries out the inspection and investigation of the books andaccounts maintained by the members of the Stock Exchange.
(a) the respective Stock Exchange
(b) Economic Offence Wing
(c) Ministry of Finance
(d) None of the above
Correct Answer 53 TRUE
Correct Answer 54 None of the above
Answer
Explanation
Regulation 19 of the SEBI (Stock Brokers and Sub-Brokers) Regulations givesthe SEBI Board the right to inspect.
SEBI may appoint inspecting authority to undertake inspection of the books ofaccount, other records and documents of the stock brokers, with or withoutnotice.
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Question 55 As per the Code of Conduct for the Debenture Trustees, a Debenture
Trustee is responsible for the acts or omissions of its __________ in respect
to the conduct of its business.
(a) Employees
(b) Agents
(c) Both 1 and 2
(d) None of the above
Question 56 Whenever there is a violation of any regulations, the designated authority
issues a show cause notice. The show-cause notice shall specify the period
,not exceeding _________, within which reply should be submitted in
written representation along with documentary evidence, if any, in
support of the representation to the designated authority.
(a) 7 days
(b) 15 days
(c) 21 days
(d) 30 days
Correct Answer 55 Both 1 and 2
Correct Answer 56 21 days
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Question 57 The Department of Disinvestment is concerned with which of the following
options?
(a) Pension Regulation and Reforms
(b) Direct Taxes
(c) Disinvestment of Public Sector units
(d) All of the above
Question 58 _______ is the central nodal agency responsible for receiving, processing,
analyzing and disseminating information regarding suspicious financial
transactions in order to support anti-money laundering efforts.
(a) Financial Intelligence Unit - India (FIU-I)
(b) Economic Offence Wing (EOW)
(c) SEBI
(d) RBI
Correct Answer 57 Disinvestment of Public Sector units
Answer
Explanation
Department of Disinvestment oversees, among other things, all matters relatingto the disinvestment of Central Government equity from Central Public Sectorundertakings.The department is also concerned with the financial policy relating to theutilization of proceeds of disinvestment.
Correct Answer 58 Financial Intelligence Unit - India (FIU-I)
Answer
Explanation
FIU-I is an independent body reporting directly to the Economic IntelligenceCouncil headed by the Finance Minister and is the central nodal agencyresponsible for receiving, processing, analyzing and disseminating informationregarding suspicious financial transactions in order to support anti-moneylaundering efforts
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Question 59 Which of the following is/are considered critical reporting for a
Compliance Officer ?
(a) Money Laundering Activities
(b) Submission of books of accounts
(c) Submission of sauda books
(d) All of the above
Question 60 The objective of the SEBI (Prohibition of Insider Trading) Regulation is to
prohibit insider from ___________ on matters relating to insider trading?
(a) Dealing
(b) Counselling
(c) Communicating
(d) All of the above
Correct Answer 59 Money Laundering Activities
Correct Answer 60 All of the above
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Question 61 Self Regulatory Organisations need to conform to the conditions as laid
down under SEBI (Intermediaries) Regulations, 2008 - State True or False
?
(a) FALSE
(b) TRUE
Question 62 A KYC Registering Agency (KRA) need not have a electronic connectivity
in order to establish interoperability with KRA's - State True or False ?
(a) TRUE
(b) FALSE
Correct Answer 61 FALSE
Answer
Explanation
For recognition as an SRO, certain conditions have to be met as prescribedunder the SEBI (Self Regulatory Organizations) Regulations, 2004.
Correct Answer 62 FALSE
AnswerExplanation
KRA has to have a electronic connectivity in order to establish interoperabilitywith other KRA's.
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Question 63 Which of these organisations are not covered under PLMA ?
(a) Mutual Funds
(b) Manufacturing Firms taking Fixed Deposits for business expansion
(c) Stock Brokers
(d) Sub Brokers
Question 64 As per SEBI (Depositories and Participants) Regulations code of conduct,a Depository Participant shall not make untrue statements or suppress any
material fact in any __________ furnished to SEBI.
(a) Information
(b) Reports
(c) Documents
(d) All of the above
Correct Answer 63 Manufacturing Firms taking Fixed Deposits for business expansion
Answer
Explanation
The PMLA ie. Prevention of Money Laundering Act covers all FinancialIntermediaries, and this includes Mutual Funds, Stock and Sub Brokers.
Correct Answer 64 All of the above
Answer
Explanation
A Participant shall not make any untrue statement or suppress any material factin any documents, reports, papers or information furnished to SEBI.
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Question 65 The functions of SEBI as per the SEBI Act includes __________.
(a) Promoting and regulating self-regulatory organisations
(b) Regulating substantial acquisition of shares and take-over of companies
(c) Regulating the business in stock exchanges and any other securities markets
(d) All of the above
Question 66 Dealing in securities shall be deemed to be a fraudulent or an unfair trade
practice if it involves fraud and may include an intermediary promising a
certain price in respect of buying or selling of a security to a client and
___________.
(a) waiting till a discrepancy arises in the price of such security and retaining the
difference in prices as profit for himself.(b) promising an opposite transaction at a different price to another client
(c) promising an opposite transaction at a different price at a later date to sameclient
(d) all of the above
Correct Answer 65 All of the above
Correct Answer 66 waiting till a discrepancy arises in the price of such security and retaining thedifference in prices as profit for himself.
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Question 67 As per Section 19A of the Depositories Act, the penalty for delay in
dematerialization or issue of certificate of securities is Rs. _____ per day or
Rs 1 crore which ever is less.
(a) 25000
(b) 50000
(c) 1 lakh
(d) 3 lakhs
Question 68 Which following is/are deemed to be price sensitive information ?
(a) Issue of securities or buy back of securities
(b) Amalgamation, mergers or takeovers
(c) Periodic financial results of the company
(d) All of the above
Correct Answer 67 1 lakh
Answer
Explanation
Penalties for delay in dematerialization or issue of certificate of securities is Rs.
1 crore or Rs.1 lakh for each day of default, whichever is less.
Correct Answer 68 All of the above
Answer
Explanation
Price sensitive information is any information which if published, is likely tomaterially affect the price of securities of that company.
The following are deemed to be price sensitive information:- Periodic financial results of the company.- Intended declaration of dividends (both interim and final).-Issue of securities or buy back of securities.-Any major expansion plans or execution of new projects.
-Amalgamation, mergers or takeovers.- Disposal of the whole or substantial part of the undertaking.
-Any significant changes in policies, plans or operations of the company.
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Question 69 Interest rate futures can have the underlying as ___________.(a) Government Securities
(b) T Bills
(c) Both 1 and 2
(d) None of the above
Question 70 As an integral part of Client Due Diligence, an intermediary has to verify
the customer identity using reliable, independent source documents, data
or in-formation - True or False ?
(a) TRUE
(b) FALSE
Correct Answer 69 Both 1 and 2
Answer
Explanation
Interest-rate Futures are contracts in which the underlying asset is a debtsecurity, like futures on Treasury Bills (T-Bills), Commercial Paper (CP) orGovernment Securities.
Correct Answer 70 TRUE
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NISM SERIES III ASECURITIES INTERMEDIARIES
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Practice Question Banks also available for :
NISM
NISM Series I: Currency Derivatives Certification Exam
NISM Series V A: Mutual Fund Distributors Certification ExamNISM 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)
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