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

A trading member wants to carry out proprietary trades and client trades on the exchange, and also wants to settle its own trades without depending on another member. Which category of member would it need to be?

The firm needs to be a trading-cum-clearing member. This category can execute trades and also clear and settle its own and its clients' trades directly with the clearing corporation. A trading-only member depends on a clearing member, and a professional clearing member does not trade.

  1. ATrading member only, with settlement through any custodian
  2. BTrading-cum-clearing memberCorrect
  3. CProfessional clearing member
  4. DSub-broker

Explanation

A trading-cum-clearing member can trade and also clear and settle its own trades and those of its clients. A professional clearing member does not trade and only clears for others. A trading member only needs a clearing member to settle. Sub-brokers are not clearing entities.

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