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

A sub-broker's functioning in the cash market, as a person acting on behalf of a stock broker, is now best described under current SEBI framework as which of the following?

They are treated as authorised persons of the stock broker, registered with the stock exchange, after SEBI discontinued the separate sub-broker registration category. They are not clearing members, custodians or depositories, and they operate under the stock broker's responsibility.

  1. AAn authorised person of the stock broker, registered with the exchangeCorrect
  2. BA clearing member of the clearing corporation
  3. CA custodian to the stock broker
  4. DA depository of the stock broker

Explanation

Since the sub-broker registration category was discontinued by SEBI, former sub-brokers either became trading members or are registered as authorised persons with the exchange, working under the stock broker. They are not clearing members, custodians or depositories.

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