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

Which of the following is a feature of a stock exchange in India that has been recognised under the Securities Contracts (Regulation) Act, 1956?

A recognised stock exchange provides a regulated trading platform and must comply with SEBI-approved rules, byelaws and regulations. It cannot function without recognition, does not bypass offer document requirements, and gives no guarantee of returns on traded securities.

  1. AIt can operate without any approval from SEBI if it has fewer than 100 members
  2. BIt provides a regulated platform for trading in securities and must comply with SEBI-approved rules, byelaws and regulationsCorrect
  3. CIt is permitted to issue securities on behalf of companies without any offer document
  4. DIt guarantees a minimum return on every security traded on it

Explanation

A recognised stock exchange offers an organised, regulated market and must follow rules, byelaws and regulations approved by SEBI. It cannot operate without recognition, it does not issue securities in place of issuers without disclosures, and it never guarantees returns on traded securities.

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