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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market

Ms. Sunita Iyer holds 200 shares in demat form and sells them on the exchange. Which sequence best reflects the roles of market participants in completing her sale?

The broker executes the trade on the exchange, the clearing corporation computes obligations and manages settlement, and the depository transfers the shares from her demat account to the buyer's by book entry. Depositories do not execute trades.

  1. ABroker executes the trade; clearing corporation arranges settlement; securities move from her demat account through the depositoryCorrect
  2. BDepository executes the trade; broker maintains her demat account; exchange issues certificates
  3. CRegistrar executes the trade; company transfers certificates by post
  4. DClearing corporation executes the trade; SEBI settles funds

Explanation

The trading member executes the order on the exchange, the clearing corporation determines obligations and guarantees settlement, and the depository debits her account and credits the buyer's via DPs. The other options assign roles incorrectly, such as depositories executing trades.

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