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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 start clearing and settling trades on its own account and for its clients on a recognised clearing corporation, without relying on another member. Which category of membership must it hold?

The firm must be a self-clearing member. This category clears and settles trades done by itself and its clients directly with the clearing corporation, whereas a trading member alone depends on another clearing member and a professional clearing member only clears for others.

  1. ATrading member only
  2. BSelf-clearing memberCorrect
  3. CProfessional clearing member
  4. DAuthorised person

Explanation

A self-clearing member clears and settles its own trades and its clients' trades. A trading member only needs a clearing member to settle for it. A professional clearing member does not trade and clears only for others. An authorised person is an agent of a member, not a clearing category.

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