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

Before an investor begins trading in the equity derivatives segment, which document must the trading member obtain from the client as part of the know-your-client process, in addition to the account opening form?

The trading member must give the client a risk disclosure document and obtain the client's signed acknowledgement. It informs the investor about the risks of derivatives trading. A bank guarantee, employer NOC or exchange net worth certificate is not a mandatory onboarding requirement.

  1. AA risk disclosure document, which the client must sign after reading itCorrect
  2. BA written guarantee from the client's bank for the full contract value
  3. CA no-objection certificate from the client's employer
  4. DA certificate from the exchange confirming the client's net worth

Explanation

Trading members must give the client the risk disclosure document explaining the risks of derivatives trading and take the client's acknowledgement. A bank guarantee, employer NOC or exchange net worth certificate is not a required document for onboarding.

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