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

A stock broker in the cash segment wants to use the services of a sub-broker-like intermediary to bring in clients under current SEBI framework. Which entity is the person who is registered with SEBI and affiliated to a stock broker to solicit clients and is not a member of the exchange?

The correct answer is an authorised person. Under the current framework, an authorised person is appointed by a stock broker and approved by the exchange to deal with clients, without being an exchange member. Trading, clearing and professional clearing members are all exchange members.

  1. AAuthorised personCorrect
  2. BClearing member
  3. CTrading member
  4. DProfessional clearing member

Explanation

Since the sub-broker category was discontinued, a person associated with a broker to solicit business is an authorised person approved by the exchange and appointed by the broker. Clearing and trading members are exchange members. A professional clearing member only clears trades for others.

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