NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Market Participants in the Securities Market
A foreign portfolio investor buys shares through a Mumbai broker. Which participant would normally confirm the trade details from the broker and carry out settlement of the securities and funds on behalf of the institutional client?
A custodian does this. For institutional clients like foreign portfolio investors, the custodian confirms trade details received from the broker, settles funds and securities, and safekeeps the holdings. Listing departments, rating agencies and investor protection trustees have no role in client trade settlement.
- ACustodianCorrect
- BStock exchange listing department
- CCredit rating agency
- DInvestor protection fund trustee
Explanation
Custodians hold securities for institutional clients such as FPIs, confirm trades received from the broker and handle the settlement of funds and securities. Listing departments, rating agencies and investor protection fund trustees do not perform settlement for clients.
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