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

Which statement about a stock exchange recognised under the Securities Contracts (Regulation) Act, 1956 is correct in the present Indian market structure?

Recognised stock exchanges in India are corporatised and demutualised, meaning ownership, management and trading rights are separated. This reduces conflicts of interest among those who own, run and trade on the exchange. SEBI regulates exchanges but does not own or operate them.

  1. AStock exchanges are required to be corporatised and demutualised, separating ownership, management and trading rightsCorrect
  2. BStock exchanges must be run as mutual organisations owned by their trading members
  3. CStock exchanges are owned and operated directly by SEBI
  4. DStock exchanges may admit only government securities for trading

Explanation

Recognised exchanges in India have been corporatised and demutualised, so ownership, management and trading membership are separate. This reduces conflicts of interest between owners and traders. SEBI regulates exchanges but does not own them, and exchanges trade many types of securities.

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