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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Operational Aspects of Investment Management

In the operational set-up of an investment advisory or asset management business, which function is mainly responsible for verifying that trades executed by the front office are correctly recorded and confirmed with the counterparty, independent of the person who executed them?

The back office verifies and confirms trades with counterparties, handles settlement and maintains records. It works independently of the front office dealers who execute the trades, which provides a check against errors and unauthorised dealing.

  1. ABack officeCorrect
  2. BFront office
  3. CFund marketing desk
  4. DInvestor relations desk

Explanation

The back office handles trade confirmation, settlement, and record keeping, and it is kept independent of the dealer who executes trades. The front office executes trades, so it cannot verify its own work independently. Marketing and investor relations do not perform trade verification.

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