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

As per the regulatory framework, which of the following is a requirement for a person to act as a sub-broker or authorised person dealing with derivatives clients of a trading member?

An authorised person dealing with derivatives clients must be approved by the exchange and works under a trading member, who remains responsible for the person's acts. Such a person cannot operate independently, and registration is not optional or tied to being a SEBI employee.

  1. ARegistration is optional and depends on the client's wishes
  2. BThey must be approved by the exchange and operate under the trading member's responsibility, with the trading member liable for their actsCorrect
  3. CThey can operate independently without any link to a trading member
  4. DThey must be employees of SEBI

Explanation

Authorised persons are approved by the exchange and act on behalf of a trading member, who remains responsible for their actions. They cannot operate independently of a member, and SEBI employment is irrelevant.

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