Skip to content

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

A client of a stock broker wants to keep securities purchased with the broker for a long time. As per SEBI norms on handling client securities, what must the broker do after the pay-out of securities?

After the pay-out, the broker must transfer the securities to the client's demat account within the prescribed time. It cannot retain them in its pool account, pledge them for its own borrowings, or delay transfer until the client asks later.

  1. ATransfer the securities to the client's demat account within the stipulated time after pay-outCorrect
  2. BKeep the securities in the broker's own pool account permanently
  3. CPledge them for the broker's own borrowings
  4. DTransfer them only when the client requests in writing after one year

Explanation

Brokers must credit the securities to the client's demat account within the prescribed time after pay-out, and cannot retain them, use them for their own borrowings, or wait for a client request. Misusing client securities is a serious violation.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Securities Broking Operations shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Securities Broking OperationsFree diagnostic mock

More Introduction to Securities Broking Operations questions