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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Sales Practices and Investors Protection Services

A trading member's client has a dispute over a derivatives trade and wants to seek resolution under the exchange framework. Which route is generally the formal exchange-based mechanism for resolving such disputes between a client and a trading member?

The formal exchange-based route for a client-trading member dispute is arbitration under the stock exchange's arbitration mechanism. Depository participants, index providers and clearing corporations do not adjudicate such client disputes, so they are not the appropriate forum.

  1. AArbitration under the stock exchange's arbitration mechanismCorrect
  2. BFiling a suit directly with the clearing corporation
  3. CApproaching the depository participant of the client
  4. DRequesting the index provider to settle the matter

Explanation

Disputes between clients and trading members relating to exchange-traded transactions are referred to the exchange's arbitration mechanism after the complaint stage. Clearing corporations, depository participants and index providers are not forums for such disputes.

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