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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

In the context of a stock broker's operations, what is the main purpose of the Unique Client Code (UCC) that a broker must assign and upload to the exchange for each client?

The Unique Client Code identifies each client uniquely, so every order and trade placed through the broker can be traced to the actual client. It is not used to fix brokerage, margins or the settlement day, which are determined separately.

  1. ATo identify each client uniquely so that every order and trade can be traced to the clientCorrect
  2. BTo fix the brokerage rate that the client will pay
  3. CTo determine the margin the client must deposit
  4. DTo decide the settlement day for the client's trades

Explanation

The UCC is a unique identifier given to every client, and trades are tagged with it so that orders and trades can be traced to the actual client. It does not set brokerage, margin or the settlement cycle, so those options are wrong.

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