Skip to content

NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Introduction to Securities Markets

Which of the following best describes a 'stock exchange' recognised in India for the purpose of trading in securities?

A stock exchange in India is an entity recognised under the Securities Contracts (Regulation) Act, 1956 that provides a regulated platform where securities are bought and sold. Depositories only hold securities in electronic form, and mutual funds are investment vehicles, not trading platforms.

  1. AAn entity recognised under the Securities Contracts (Regulation) Act, 1956 that provides a platform for trading in securitiesCorrect
  2. BA bank licensed by RBI to accept deposits of securities
  3. CA depository registered to hold securities in electronic form
  4. DA mutual fund that invests in listed shares only

Explanation

Stock exchanges are recognised under the Securities Contracts (Regulation) Act, 1956 and provide a regulated platform for trading. A depository holds securities electronically and does not provide trading. Banks and mutual funds serve different roles.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Securities Markets shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Securities MarketsFree diagnostic mock

More Introduction to Securities Markets questions