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

A broker receives an order from a client with a Unique Client Code (UCC). Why is the UCC mapped to the client's PAN and details in the exchange's database?

The UCC is mapped to the client's PAN and details so the exchange can identify who actually placed each order and apply client-level monitoring and checks. It has nothing to do with brokerage rates, guaranteeing settlement or waiving margin requirements.

  1. ATo fix the brokerage rate the client pays
  2. BTo guarantee that the client's trades will settle without delay
  3. CTo allow the exchange to identify the actual client behind each order and enforce client-level checksCorrect
  4. DTo exempt the client from paying margins

Explanation

The UCC database links each client's PAN and details to the code used in orders, so exchanges can identify the ultimate beneficiary and monitor client-level positions and surveillance. It does not set brokerage, guarantee settlement or waive margins.

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