Skip to content

NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Clearing Process

A clearing member has the following pay-in positions for one settlement day: Client A buys 500 shares of a company and Client B sells 200 shares of the same company, both through the same member, with the member's proprietary account selling 100 shares of the same company. Under the clearing corporation's netting at member level, what is the member's net obligation in that security?

The member has a net receipt of 200 shares. Purchases of 500 shares are offset against total sales of 300 shares, including the proprietary sale, leaving a net position of 200 shares to be received from the clearing corporation.

  1. AReceive 200 sharesCorrect
  2. BReceive 800 shares
  3. CDeliver 200 shares
  4. DReceive 300 shares

Explanation

Total buys are 500. Total sells are 200 + 100 = 300. Net = 500 - 300 = 200 shares to receive. The option of 300 ignores the proprietary sale being netted differently; 800 adds the sales as if they were purchases.

Did you get it right without looking?

One question tells you little. A timed set on Clearing Process shows your real accuracy, how long you take and where you lose marks.

Practise Clearing ProcessFree diagnostic mock

More Clearing Process questions