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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, which document must a broker and a new client sign as the mandatory agreement covering the rights and obligations of both parties, which the broker cannot dilute?

The Rights and Obligations document is the mandatory SEBI-prescribed agreement setting out the rights and duties of broker and client. It is given to every client at account opening. A power of attorney is optional, and the risk disclosure document is a separate disclosure.

  1. APower of attorney
  2. BRights and Obligations documentCorrect
  3. CRisk disclosure document only
  4. DDemat debit and pledge instruction

Explanation

SEBI prescribes a Rights and Obligations document that sets out the rights and duties of brokers, sub-brokers and clients, and it must be given to the client. A power of attorney is optional and is not the standard agreement. The risk disclosure document is a separate mandatory document and does not itself set out the mutual rights and obligations. A DDPI relates to demat operations.

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