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

A broker's client, Mr. Iyer, opens a trading account. Which document set forms the standard account opening documentation that a broker must execute with every new client, as prescribed by SEBI and exchanges?

The standard documentation comprises the account opening form with KYC details, the rights and obligations document, and the risk disclosure document. PAN alone or bank statements are inadequate, and a power of attorney cannot be made mandatory for opening a trading account.

  1. AOnly a PAN copy and a cancelled cheque
  2. BOnly a bank statement of the last six months
  3. CAccount opening form with KYC, rights and obligations document, and risk disclosure documentCorrect
  4. DA power of attorney in favour of the broker, which is mandatory

Explanation

The standard set includes the account opening form including KYC, the Rights and Obligations document, the Risk Disclosure Document and the Guidance Note. A PAN copy alone is insufficient. A power of attorney is not mandatory and cannot be forced on a client as a condition for service.

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