Skip to content

NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners

A DP wishes to outsource part of its back-office activities. Which of the following is the correct position under the depository framework?

The DP remains fully responsible and accountable for any outsourced activity. Outsourcing may delegate the work, but not the compliance obligations or the liability towards the depository, the regulator and the clients.

  1. AThe DP is freed of responsibility once the activity is outsourced
  2. BThe DP remains fully responsible and accountable for outsourced activities towards the depository and clientsCorrect
  3. CThe outsourced agent becomes the sole liable party to the investor
  4. DOutsourcing is permitted only with the investor's written approval for each transaction

Explanation

Outsourcing does not transfer accountability. The DP stays responsible for compliance and for obligations to the depository, regulator and clients. The other options wrongly shift liability or add an approval requirement that does not exist.

Did you get it right without looking?

One question tells you little. A timed set on Depository and its Business Partners shows your real accuracy, how long you take and where you lose marks.

Practise Depository and its Business PartnersFree diagnostic mock

More Depository and its Business Partners questions