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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Other Services Provided by Brokers

A broker provides research recommendations to clients alongside its trading services. Which requirement is most relevant for the broker's research activity?

Research activity by a broker must comply with SEBI's Research Analyst regulations, including registration and disclosure of conflicts of interest. Guaranteeing returns or hiding conflicts is not allowed, so disclosure and regulatory compliance are central.

  1. ANo regulation applies to research by brokers
  2. BResearch analyst activities must follow SEBI's Research Analyst regulations and disclosure requirementsCorrect
  3. CResearch is allowed only if the broker guarantees returns
  4. DResearch reports need not disclose conflicts of interest

Explanation

Research services by a broker fall under SEBI's Research Analysts regulations, including registration of analysts and disclosure of conflicts of interest. Guaranteeing returns is prohibited, and ignoring disclosures breaches the rules.

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