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

A broker's client opens an account with the broker. Which of the following documents is a mandatory part of the account opening documentation prescribed for the broker-client relationship?

The Rights and Obligations document is a mandatory document in the account opening set. The broker must give it to the client and take an acknowledgement. Income tax assessment orders, salary certificates and bank guarantees are not compulsory for opening an ordinary trading account.

  1. ARights and Obligations document, which is given to the client and acknowledgedCorrect
  2. BClient's latest salary slip and employer certificate
  3. CClient's income tax assessment order of the last three years
  4. DA bank guarantee from the client for the trading limit

Explanation

Along with the Account Opening Form and KYC, the Rights and Obligations document, risk disclosure document and guidance note are mandatory documents. These must be provided to the client and acknowledgement obtained. Salary slips and bank guarantees are not mandatory for account opening, though income proof may be sought for derivatives.

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