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

Which of the following is correctly matched with its role in the securities market?

The clearing corporation acts as the central counterparty to trades and guarantees their settlement. Depository participants only provide demat services, registrars handle allotment and records, and merchant bankers manage issues, so the other matches are wrong.

  1. ADepository participant: guarantees settlement of trades on the exchange
  2. BClearing corporation: acts as a counterparty to trades and guarantees settlementCorrect
  3. CRegistrar to an issue: sets margins for trading members
  4. DMerchant banker: holds securities in demat form for investors

Explanation

Through novation, the clearing corporation becomes the counterparty to trades and guarantees settlement. Depository participants act as agents of depositories for demat accounts, registrars handle issue applications and allotment, and merchant bbankers manage issues.

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