NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Clearing Process
A clearing member's gross obligation shows that it bought 1,000 shares of Infosys and sold 600 shares of Infosys on the same day for the same settlement, all through one client-neutral proprietary account. What is its net obligation for settlement in Infosys shares?
The member must receive 400 shares. Netting offsets buys of 1,000 against sells of 600 in the same security and settlement, leaving a net purchase of 400 shares, so the member is a net receiver of securities at pay-out.
- AReceive 400 sharesCorrect
- BDeliver 400 shares
- CReceive 1,600 shares
- DDeliver 600 shares
Explanation
Net obligation is purchases minus sales: 1,000 - 600 = 400 shares. Since purchases exceed sales, the member is a net buyer and will receive 400 shares. Adding the two quantities (1,600) ignores netting.
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.
More Clearing Process questions
- A broker's client buys 1,000 shares on Monday on a T+1 rolling settlement basis, with no holidays in the week. In which broad sequence does …
- A broker has paid pay-in funds and securities for a settlement. When the clearing corporation completes the pay-out, securities are credited…
- A broker's client buys 200 shares at Rs 500 under the T+1 rolling settlement. The trade is executed on Monday and there are no holidays that…
- A clearing member fails to meet its pay-in obligation of funds on settlement day. Which fund or resource of the clearing corporation is used…
- Under the rolling settlement cycle prevailing in Indian equity markets, the clearing process determines each member's obligations after trad…
- A clearing member's obligations are computed by the clearing corporation after trading hours. What is the term for reducing a member's many …