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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

A broker receives a client's order for shares but the client has not paid any funds, and the broker's system shows the order is a 'client' order. What is the broker obliged to do regarding client order records?

The broker must maintain records of client orders with time stamps and client codes for audit and dispute resolution. It cannot delete them after the trade day, record only executed trades, or apply a value threshold for record keeping.

  1. AMaintain a record of orders with time stamps and the client code, for audit and dispute resolutionCorrect
  2. BDelete order details after the trade day to save storage
  3. CRecord only executed trades and ignore rejected or unexecuted orders
  4. DRecord orders only when the order value exceeds one lakh rupees

Explanation

Brokers are required to preserve order and trade records, including time of receipt and client identity, to support audits and resolve disputes. Keeping only executed trades or deleting records breaches record-keeping norms, and no value threshold applies.

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