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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

A stock broker's client wants to start trading in the cash segment. Before the first trade is executed, which document set must the broker obtain from the client as part of the account opening process?

The broker must obtain a completed account opening form with KYC details and the signed mandatory documents, including the rights and obligations document. A cancelled cheque alone is insufficient, and neither exchange approval nor a previous broker's NOC is required to open a trading account.

  1. AOnly a cancelled cheque from the client's bank
  2. BA duly filled account opening form with KYC details and the mandatory rights and obligations document signed by the clientCorrect
  3. CA no-objection certificate from the client's previous broker
  4. DA letter from the exchange approving the client

Explanation

Account opening requires the client to submit the account opening form with KYC and to sign the mandatory documents such as the rights and obligations document. A cancelled cheque alone is not sufficient, and no exchange approval or NOC from a previous broker is needed for a new client.

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