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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Legal and Regulatory Environment

Which of the following best describes the role of a Compliance Officer at a trading member in the equity derivatives segment?

A compliance officer ensures that the trading member follows SEBI and exchange regulations and reports any violations to the exchange or regulator. The role is supervisory and is separate from pricing, margin setting or deciding contract lot sizes, which are handled by other functions.

  1. AQuoting prices to clients for derivatives trades
  2. BEnsuring the member's adherence to exchange and SEBI regulations and reporting violationsCorrect
  3. CSetting the margin rates for the clearing corporation
  4. DApproving the lot sizes of index contracts

Explanation

The compliance officer monitors adherence to SEBI and exchange rules and reports non-compliance. Pricing is a trading function, while margins and lot sizes are determined by the clearing corporation, exchange and SEBI framework.

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