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NISM Series VII - Securities Operations and Risk Management Certification Sample Questions (Q310-Q315):
NEW QUESTION # 310
Under the cross-margining facility, if a client holds a long position in Index Futures and a corresponding short position in the constituent stock futures (in the ratio specified to replicate the index) with the **same expiry month**, what is the applicable * *spread margin* * levied on the eligible offsetting positions?
- A. 0% (Total margin exemption).
- B. 40% of the total applicable margin.
- C. 30% of the applicable upfront margin.
- D. 100% of the higher margin of the two positions.
- E. 25% of the total applicable margin on the eligible offsetting positions.
Answer: E
Explanation:
In cases where positions in derivatives segment for stock futures and index futures are in the same expiry month, a **spread margin of 25%" of the total applicable margin on the eligible offsetting positions shall be levied. (30% is for eligible equity indices pairs).
NEW QUESTION # 311
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 calculated as 25% of the liquid net worth of the Clearing Corporation plus the total Base Minimum Capital collected from members.
- B. It is fixed annually by SEBI based on the projected volume and turnover of the Clearing Corporation.
- C. It is the simple average of the daily stress test losses of the preceding month, capped at 15% of the total open interest.
- D. It is determined by the Risk Management Committee based on the highest single day loss observed in the last one year.
- E. 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.
Answer: E
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 # 312
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 amount exceeds 10% of the closing price of the scrip on the record date.
- B. If the dividend declared is more than 5% of the paid-up capital of the company.
- C. If the dividend is declared as an 'interim' dividend rather than a 'final' dividend.
- D. If the dividend amount is at and above 2% of the market value of the underlying security.
- E. If the dividend yield exceeds the risk-free interest rate (MIBOR) prevailing on the declaration date.
Answer: D
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 # 313
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. Promissory Notes issued by private individuals for personal loans
- C. Electronic Gold Receipts issued on the basis of deposit of underlying physical gold
- D. Insurance Policies linked to Unit Linked Insurance Plans (ULIPs)
- E. Real Estate Sale Deeds registered under the Registration Act
Answer: C
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 # 314
Under the Online Dispute Resolution (ODR) framework, if a Market Participant wishes to initiate dispute resolution against an investor/client through the ODR Portal, which of the following procedural pre-requisites must be strictly fulfilled?
- A. The Market Participant must give due notice of at least 15 calendar days to the investor/client for resolution of the dispute.
- B. The Market Participant must deposit 50% of the disputed amount with the Stock Exchange.
- C. The Market Participant must obtain a 'No Objection Certificate' from SEBI.
- D. The Market Participant must wait for a mandatory cooling-off period of 60 days from the date of the transaction.
- E. The Market Participant can only initiate ODR if the claim value exceeds Rs. 10 Lakhs.
Answer: A
Explanation:
According to the source, 'The concerned Market Participant may also initiate dispute resolution through the ODR Portal after having given due notice of at least 15 calendar days to the investor/client for resolution of the dispute which has not been satisfactorily resolved between them'.
NEW QUESTION # 315
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