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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Market Participants in the Securities Market

A foreign portfolio investor wants its Indian securities held in safe custody and its trades settled through a clearing member on its behalf. Which market intermediary typically provides this service to institutional clients?

A custodian provides this service. Custodians keep institutional clients' securities in safe custody and take care of trade confirmation and settlement through clearing members, which suits FPIs and mutual funds. Merchant bankers, debenture trustees and exchange listing departments do not perform these functions.

  1. ACustodianCorrect
  2. BMerchant banker
  3. CDebenture trustee
  4. DStock exchange listing department

Explanation

Custodians hold securities of institutional clients such as FPIs and mutual funds, and handle confirmation and settlement of their trades. A merchant banker manages issues, a debenture trustee protects debenture holders, and the listing department deals with listed companies, so those are wrong.

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