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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Legal and Regulatory Environment

A trading member wishes to be admitted to the equity derivatives segment of an exchange. Which of the following is a correct statement about the regulatory structure for such a member?

A trading member must be a SEBI-registered stock broker and must also be admitted to the derivatives segment by the exchange after meeting its requirements. Cash segment membership alone does not give automatic access, and approvals from RBI or a depository are not the relevant route.

  1. AThe member needs registration with SEBI and admission by the exchange for the derivatives segmentCorrect
  2. BOnly a registration with the RBI is needed
  3. CNo registration is required if the member is already a stock broker in the cash segment
  4. DThe member needs approval only from the depository

Explanation

A trading member in the derivatives segment must be registered with SEBI as a stock broker and admitted to the segment by the exchange, meeting its net worth and other requirements. Being a cash market broker alone does not automatically grant derivatives access. RBI and depository approvals are not the route.

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