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

A professional clearing member (PCM) differs from a trading-cum-clearing member mainly because a PCM:

A professional clearing member provides clearing and settlement services to trading members and custodial participants but does not trade itself. This contrasts with a trading-cum-clearing member, who both trades and clears, so a PCM's role is purely to clear and settle for others.

  1. ATrades on its own account and for clients on the exchange
  2. BClears and settles trades for other trading members but does not trade itselfCorrect
  3. COnly acts as a depository participant for investors
  4. DIs permitted to hold client securities only in physical form

Explanation

A PCM is typically a bank or financial institution that offers clearing and settlement services to trading members and custodial participants, but it does not carry out trading itself. A trading-cum-clearing member both trades and clears. The depository and physical-form options do not describe a PCM.

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