Dumps Moneyack Guarantee - NISM-Series-VII Dumps UpTo 50% Off [Q27-Q46]

Dumps Moneyack Guarantee - NISM-Series-VII Dumps UpTo 50% Off

Updated Jun-2026 Pass NISM-Series-VII Exam - Real Practice Test Questions

NEW QUESTION # 27
According to the Securities Contracts (Regulation) Act, 1956 (SCRA), the definition of 'Securities' has been expanded to include various instruments. Which of the following specific instruments is explicitly included in this definition as per the Act?

• A. Fixed Deposit Receipts issued by Scheduled Commercial Banks
• B. Real Estate Sale Deeds registered under the Registration Act
• C. Insurance Policies linked to Unit Linked Insurance Plans (ULIPs)
• D. Electronic Gold Receipts issued on the basis of deposit of underlying physical gold
• E. Promissory Notes issued by private individuals for personal loans

Answer: D

Explanation:
As per the definition of 'Securities' in the Securities Contract Regulation Act (SCRA), 1956, the term includes 'Electronic Gold Receipt', which means an electronic receipt issued on the basis of deposit of underlying physical gold in accordance with regulations made by SEBI. It also includes Zero Coupon Zero Principal Instruments, among others like shares, bonds, and derivatives.

NEW QUESTION # 28
As per the SEBI International Financial Services Centres (IFSC) guidelines, 2015, which of the following types of securities and products are permitted for dealing on the stock exchanges operating in the IFSC? (Select all that apply)

• A. Debt securities issued by eligible issuers
• B. REITs and InviTs
• C. Currency and interest rate derivatives
• D. Equity shares of a company incorporated outside India
• E. Depository receipts

Answer: A,B,C,D,E

Explanation:
As per the SEBI International Financial Services Centres (IFSC) guidelines, 2015, the stock exchanges operating in IFSC are permitted to deal in all the listed options: Equity shares of a company incorporated outside India, Depository receipt(s), Debt securities issued by eligible issuers, Currency and interest rate derivatives, Index based derivatives, Commodity derivatives, and REITs and InvITs.

NEW QUESTION # 29
Stock brokers are required to maintain evidence of clients placing orders to prevent unauthorized trades. Which of the following statements accurately describes the regulatory requirements regarding the forms of evidence and the retention period?

• A. Evidence is optional for internet-based transactions and must be retained for 1 year.
• B. Evidence can be physical records, telephone recordings, emails, or SMS logs, and must be retained for a minimum of 3 years.
• C. Evidence must be physical records only, retained for 5 years.
• D. In case of a dispute, records can be disposed of immediately after the broker files a response.
• E. Telephone recordings are mandatory only for institutional clients and must be kept for 2 years.

Answer: B

Explanation:
The source states that brokers shall execute trades only after keeping evidence in forms such as 'Physical record written & signed by client, Telephone recording, Email from authorized email id, Log for internet transactions, Record of SMS messages'. Regarding retention: 'The Brokers are required to maintain the records for a minimum period for which the arbitration accepts investors' complaints as notified from time to time (which is currently three years).'

NEW QUESTION # 30
Economic efficiency in the securities market is often described by the 'decoupling' of activities. Which of the following best explains the economic impact of this decoupling as defined in the source?

• A. It eliminates the need for financial intermediaries in the transfer of resources.
• B. It mandates that investors must possess surplus funds equal to the issuer's total capital.
• C. It ensures that savers and investors are constrained by the economy's abilities rather than their individual abilities.
• D. It allows savers to directly manage the administrative operations of the issuer.
• E. It restricts the allocation of savings to government-backed securities only.

Answer: C

Explanation:
The source explicitly states that securities markets provide channels for allocation of savings to investments and thereby decouple these two activities. As a result, the savers and investors are not constrained by their individual abilities, but by the economy's abilities to save and invest respectively.

NEW QUESTION # 31
Regarding the contributions to the Core Settlement Guarantee Fund (Core SGF), which of the following statements accurately reflects the regulatory requirements for Clearing Members (CMS) and the Clearing Corporation (CC)?

• A. CC contribution must be at least 25% of the MRC, and CM contribution is voluntary based on trading volume.
• B. CMS must contribute at least 50% of the MRC, and this contribution is eligible for margin exposure limits.
• C. CMS are required to contribute 100% of the MRC in the form of bank guarantees, while CC manages the fund without financial contribution.
• D. Stock Exchanges must contribute 50% of the MRC, while CC and CMS share the remaining 50% equally.
• E. CC contribution shall be at least 50% of the MRC from its own funds, and CM primary contribution shall not exceed 25% of the MRC, with no exposure granted on such contribution.

Answer: E

Explanation:
The source states: 'CC contribution to Core SGF shall be at least 50 percent of the MRC which should be from its own funds.' And 'The total contribution from members to core SGF for each segment will not be more than 25% of MRC... No exposure shall be available to CMS on their contribution to core SGF.'

NEW QUESTION # 32
According to the SEBI (International Financial Services Centres) Guidelines, 2015, which of the following criteria must a 'Person resident in India' satisfy to deal in securities listed in the IFSC?

• A. They must be a High Net-worth Individual (HNI) with a minimum net worth of INR 5 Crore.
• B. They are restricted to investing solely in Debt Securities issued by eligible issuers.
• C. They must invest only through a Foreign Portfolio Investor (FPI) registered in the IFSC.
• D. They are eligible under FEMA to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme (LRS).
• E. They must represent a corporate body incorporated in India with a minimum turnover of INR 100 Crore.

Answer: D

Explanation:
As per the SEBI (International Financial Services Centres) Guidelines, 2015, one of the categories of persons eligible to deal in securities listed in IFSC is a 'person resident in India who is eligible under FEMA, to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme of Reserve Bank of India, subject to a minimum investment as specified by the Board from time to time'.

NEW QUESTION # 33
When the obligations arising out of the cash segment settlement and physical settlement of the F&O segment are settled on a net basis, how are the Securities Transaction Tax (STT) and Stamp Duty treated?

• A. They are computed and levied on the final netted delivery obligation after merging both segments.
• B. STT is levied on the gross position, while Stamp Duty is levied on the net obligation.
• C. They are calculated based on the notional value of the F&O contract only.
• D. They continue to be computed, levied, and reported on a segment-wise level, regardless of the netting for settlement.
• E. They are waived for the cash segment leg if the position is hedged in the F&O segment.

Answer: D

Explanation:
Under the Net Settlement mechanism, netting of delivery obligations shall be only for the purpose of settlement. Therefore, Securities Transaction Tax (STT) and Stamp Duty shall continue to be computed, levied, and reported on a segment-wise level.

NEW QUESTION # 34
When a stock broker places an order for an additional subscription of mutual fund units in physical mode through the Exchange system, which of the following data fields is mandatory to ensure the transaction is processed correctly?

• A. ISIN of the Demat Account
• B. Folio Number
• C. Client Beneficiary ID
• D. Depository Participant ID
• E. UCC Mapping Code

Answer: B

Explanation:
The stock broker can request for fresh or additional subscription. For additional subscription in physical mode the folio number would be mandatory. If the DP Settlement is in depository mode, it is mandatory for the stock broker to enter depository details (Depository ID and Client Beneficiary ID).

NEW QUESTION # 35
Regarding 'Market Makers' in the Indian securities market, which of the following statements regarding their mandatory obligations is correct?

• A. Market makers are required to provide only buy quotes to ensure exit options for investors
• B. Market makers are appointed solely by SEBI and not by the Exchanges
• C. Market making has been made mandatory in respect of all scrips listed and traded on SME Exchanges
• D. Market making is restricted to the derivatives segment only
• E. Market making is voluntary for all scrips listed on Small and Medium Enterprise (SME) Exchanges

Answer: C

Explanation:
While market making operates under guidelines, for Small and Medium Enterprise (SME) Exchanges, market making has been made mandatory in respect of all scrips listed and traded on the SME Exchange. Their main responsibility is to provide two-way (buy and sell) quotes.

NEW QUESTION # 36
Cash Management Bills (CMBs) are issued by the Government of India to fund temporary cash flow mismatches. Which of the following correctly identifies their maturity characteristics and trading platform?

• A. Maturities up to 364 days; Traded on RFQ Platform
• B. Maturities less than 91 days; Traded on NDS-OM platform
• C. Maturities of exactly 91 days; Traded on NDS-CALL platform
• D. Maturities less than 14 days; Traded on OTC market only
• E. Maturities between 91 and 182 days; Traded on CROMS

Answer: B

Explanation:
Cash Management Bills (CMBs) have maturities less than 91 days. They are issued to absorb excess liquidity and fund temporary mismatches. Like Treasury bills, they are traded on the NDS-OM platform along with Government Securities.

NEW QUESTION # 37
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 guarantees settlement of trades through the process of novation.
• B. It executes client orders on the stock exchange platform on behalf of the trading members.
• C. It calculates and controls the margining mechanism.
• D. It reduces the number of payments due by netting transactions.
• E. It provides independent legal enforcement of contracts, reducing the need for buyers and sellers to take legal action against one another.

Answer: A,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 # 38
To calculate the Adjustment Factor for a **Rights Issue** in the Equity F&O segment, the 'Benefits per share (E)' must first be determined. Which formula correctly represents the calculation of 'E'?

• A.
• B.
• C.
• D.
• E.

Answer: C

Explanation:
In the context of Rights Issue adjustment, Benefits per share (E) is calculated using the formula: E = (P - S) * A1 (A + B), where P is the underlying close price on the last cum date, S is the issue price of the rights, A is the Rights Entitlement, and B is the Number of Existing shares.

NEW QUESTION # 39
To facilitate members in meeting their pay-in obligations for a subsequent settlement on a day with multiple settlements due to holidays, what specific requirement is imposed on Depositories regarding inter-depository transfers?

• A. Depositories must suspend inter-depository transfers until all settlements for the day are concluded.
• B. Depositories must allow transfers only after the pay-out of the subsequent settlement is complete.
• C. Depositories must process transfers instantly using the API-based immediate transfer mechanism.
• D. Depositories are required to waive the transaction charges for inter-depository transfers executed on such days.
• E. Depositories shall facilitate inter-depository transfers within one hour and before pay-in for the subsequent settlement begins.

Answer: E

Explanation:
The guidelines specify: 'Further, in-order to meet their pay-in obligations for the subsequent settlement, 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 # 40
While institutional trades generally do not attract upfront margins, specific categories of institutional investors are subject to upfront margining similar to non-institutional trades. Identify the category from the list below.

• A. Category II FPIs who are corporate bodies, individuals, or family offices
• B. Mutual Funds registered with SEBI
• C. Insurance Companies registered with IRDAI
• D. Category I Foreign Portfolio Investors (Sovereign Wealth Funds)
• E. Public Financial Institutions defined under the Companies Act

Answer: A

Explanation:
Trades of Category II FPIs who are corporate bodies, individuals, or family offices and domestic entities who may choose to settle trades through a Custodian shall be margined on an upfront basis as per the margining framework of non-institutional trades. Other institutional trades are margined on T+1 day subsequent to confirmation.

NEW QUESTION # 41
In the context of the validation process for Pay-In of securities from a client's demat account to the Member Pool Account, how do Depositories handle a specific transfer instruction where the quantity specified in the instruction exceeds the client-wise net delivery obligation provided by the Clearing Corporation?

• A. The instruction is processed fully, creating an excess balance in the Member Pool Account which is flagged for audit.
• B. The instruction is rejected in its entirety due to the discrepancy in quantity.
• C. The instruction is processed fully, but the excess securities are immediately returned to the client's account by the Clearing Member.
• D. The instruction is kept pending until the Clearing Corporation updates the obligation to match the instruction.
• E. The instruction is partially processed by the depositories up to the matching obligation quantity.

Answer: E

Explanation:
According to the validation process rules: 'If the quantity in instruction is more than the obligation provided by CC, then the instruction will be partially processed by the depositories (i.e., upto the matching obligation quantity).'

NEW QUESTION # 42
For the purpose of corporate action adjustments in the Equity F&O segment, under what specific condition is a dividend deemed to be 'extra-ordinary', thereby necessitating an adjustment to the futures and options contracts?

• A. If the dividend yield exceeds the risk-free interest rate (MIBOR) prevailing on the declaration date.
• B. If the dividend amount exceeds 10% of the closing price of the scrip on the record date.
• C. If the dividend is declared as an 'interim' dividend rather than a 'final' dividend.
• D. If the dividend declared is more than 5% of the paid-up capital of the company.
• E. If the dividend amount is at and above 2% of the market value of the underlying security.

Answer: E

Explanation:
According to the methodology for adjustment in Equity F&O, for extra-ordinary dividends i.e., at and above 2 percent of the market value of the underlying security, there would be an adjustment in Equity F&O. Dividends below this threshold are deemed ordinary and no adjustment is made.

NEW QUESTION # 43
According to the risk management framework regarding * *Liquid Assets** deposited by clearing members, which of the following statements correctly defines the limits and haircuts applicable to * *Corporate Bonds** accepted as collateral?

• A. No limit on quantity; Haircut based strictly on credit rating (AAA: 10%, AA: 15%).
• B. VaR based haircut; Limit not to exceed 50% of the cash component of liquid assets.
• C. Minimum haircut of 10% (Fixed percentage or VaR based); Limit not to exceed 10% of the total liquid assets of the clearing member.
• D. Treated as Cash Equivalent with 0% haircut if rated AAA.
• E. Fixed percentage haircut of 50%; Limit not to exceed 25% of total liquid assets.

Answer: C

Explanation:
As per the acceptable Liquid Assets table and notes: For Corporate Bonds, the haircut is 'Fixed percentage based or VaR based Haircut... To begin with the haircut shall be a minimum of 10 percent.' The limit is 'Not to exceed 10 percent of the total liquid assets of the clearing member.'

NEW QUESTION # 44
In the context of the Indian Money Market, issuers must adhere to specific credit rating requirements to issue Commercial Paper (CP).
What is the minimum credit rating required from a Credit Rating Agency (CRA) for the issuance of CPs?

• A. A1
• B. A2
• C. BBB
• D. AAA
• E. A3

Answer: E

Explanation:
A Commercial Paper (CP) is used by Indian corporates to raise short-term unsecured funds. According to RBI regulations, the minimum credit rating assigned by a Credit Rating Agency (CRA) for the issuance of CPs shall be 'A3' as per the rating symbol and definition prescribed by SEBI.

NEW QUESTION # 45
For Futures Contracts on Individual Securities, which price is used as the 'Final Settlement Price' on the last trading day?

• A. The closing price of the futures contract on the expiry day.
• B. The closing price of the relevant underlying security in the Capital Market Segment across exchanges.
• C. The weighted average price of the underlying security during the last 30 minutes of trading.
• D. The theoretical price calculated using the cost of carry model.
• E. The last traded price (LTP) of the underlying security on the primary exchange.

Answer: B

Explanation:
According to the Settlement Price table, the Final Settlement Price for Futures Contracts on Individual Securities is the Closing price of the relevant underlying security in the Capital Market Segment across exchanges on the last trading day of the futures contract.

NEW QUESTION # 46
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