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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Investor Grievances and Arbitration

Which of the following is a typical subject matter of a dispute that an investor can take to exchange arbitration against a trading member?

An investor can take to exchange arbitration a dispute arising from trades on the exchange, such as non-receipt of funds or securities due from the trading member. Matters like dividend policy, bank loan rates or mutual fund NAV are outside this mechanism.

  1. ANon-receipt of funds or securities due on a trade executed on the exchangeCorrect
  2. BDisagreement over a company's dividend policy
  3. CDispute about a bank's home loan interest rate
  4. DDispute over a mutual fund's NAV calculation

Explanation

Exchange arbitration covers disputes arising out of trades dealt on the exchange between members and clients, such as non-payment of dues or securities. Dividend policy, bank loans and mutual fund NAV fall outside that mechanism.

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