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

Under the SEBI framework for stock brokers, a client's trading account is opened with a broker. Which document is the standard set of rights and obligations that must be signed by both the broker and the client at the time of account opening, with no ability for the broker to alter its terms?

The Rights and Obligations document is the standard mandatory document prescribed for stock brokers and clients at account opening. Both parties sign it, and the broker cannot change its terms. A contract note follows trades, and a power of attorney is optional.

  1. ARights and Obligations document (mandatory common document)Correct
  2. BRisk disclosure document only
  3. CPower of attorney in the broker's favour
  4. DContract note issued after the first trade

Explanation

SEBI prescribes a common Rights and Obligations document for brokers and clients, which forms part of the mandatory account opening documents. A broker cannot dilute its terms. A contract note is issued after trades, and a power of attorney is optional, so those are not the answer.

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