Skip to content

NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Other Services Provided by Brokers

Which of the following best describes the purpose of a Power of Attorney (PoA) that a client may give to a broker in connection with demat operations?

A Power of Attorney lets the broker operate the client's demat account only for defined purposes, such as transferring securities to meet settlement obligations or margin requirements. It does not transfer ownership, allow bank withdrawals, or permit changing nominee or address details at will.

  1. ATo let the broker transfer securities from the client's demat account only for settlement of trades, within the scope grantedCorrect
  2. BTo let the broker withdraw cash from the client's bank account at will
  3. CTo let the broker change the client's nominee and address freely
  4. DTo transfer ownership of the client's securities to the broker

Explanation

A PoA is limited to specified purposes such as delivering securities for settlement obligations and pledge or margin related activities. It does not transfer ownership, nor does it allow the broker to withdraw bank funds or alter personal details freely.

Did you get it right without looking?

One question tells you little. A timed set on Other Services Provided by Brokers shows your real accuracy, how long you take and where you lose marks.

Practise Other Services Provided by BrokersFree diagnostic mock

More Other Services Provided by Brokers questions