Unit ko samjho · NISM Series III-A
SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003
9 questions is unit mein
Sawaal aur jawaab English mein hain, kyunki NISM ka exam paper bhi English mein hota hai.
Is unit mein kya hai
- What is the main market-integrity concern with trades designed to create artificial trading volume?
- Related accounts trade shares back and forth without a genuine ownership change to inflate turnover. Which conduct is indicated?
- A dealer learns of a large confidential client order and trades first to benefit from its expected price effect. What is this conduct?
- A group spreads false positive claims to raise a share price, then sells its holdings to attracted investors. What pattern is described?
- A trader places large orders with no intention to execute them, aiming to mislead others, then cancels them. What is the concern?
- A broker induces repeated unnecessary trades solely to earn commissions. Which abusive practice is most closely described?
- Two independent investors place genuine orders that happen to match. There is no deceptive arrangement or manipulative purpose. What is the sound conclusion?
- A person deliberately hides a material fact to induce a securities transaction. No explicit false statement is spoken. Can the conduct still constitute fraud?
- A trader places small aggressive trades near the close solely to distort the closing price used for portfolio valuation. Which issue is central?
Zaroori ideas
Practice bank se · 1
What is the main market-integrity concern with trades designed to create artificial trading volume?
Artificial volume can mislead investors about genuine demand, supply and market activity. Remember: Trading data should reflect genuine market activity rather than an engineered appearance.
Hint Common mistake: Assuming a trade is harmless merely because the exchange recorded it. Consider what other investors infer from displayed trading activity.
III-A-064Practice bank se · 2
Related accounts trade shares back and forth without a genuine ownership change to inflate turnover. Which conduct is indicated?
The described trades indicate wash trading because they manufacture volume without genuine economic ownership change. Remember: Examine the economic substance of trades, not only separate account names.
Hint Common mistake: Treating separate account identifiers as proof of independent trading. Focus on economic ownership and the purpose of the repeated trades.
III-A-065Practice bank se · 3
A dealer learns of a large confidential client order and trades first to benefit from its expected price effect. What is this conduct?
This is front-running because the dealer trades ahead using confidential information about the impending client order. Remember: Confidential order information must not be used to trade ahead of the client.
Hint Common mistake: Confusing early execution based on public analysis with trading on a confidential order. Notice whose non-public trading information creates the advantage.
III-A-066Practice bank se · 4
A group spreads false positive claims to raise a share price, then sells its holdings to attracted investors. What pattern is described?
The pattern is pump-and-dump because false promotion is used to raise the price before the promoters of the scheme sell. Remember: False promotion combined with selling can form a manipulative scheme.
Hint Common mistake: Judging a promotional message without examining the promoter’s trading interest. Link the misleading publicity to the group’s planned exit.
III-A-067Practice bank se · 5
A trader places large orders with no intention to execute them, aiming to mislead others, then cancels them. What is the concern?
The concern is a false market signal created by orders entered without genuine trading intent. Remember: Order-book conduct can be manipulative even without completed trades.
Hint Common mistake: Assuming no execution means no possible manipulation. Distinguish the stated deceptive intention from an ordinary genuine cancellation.
III-A-068Practice bank se · 6
A broker induces repeated unnecessary trades solely to earn commissions. Which abusive practice is most closely described?
Churning involves inducing unnecessary or excessive trading to generate brokerage rather than serve the client. Remember: Client trading must not be manufactured solely to generate commissions.
Hint Common mistake: Treating high turnover as evidence of good service without examining its purpose. Compare the client’s purpose with the broker’s fee incentive.
III-A-069Practice bank se · 7
Two independent investors place genuine orders that happen to match. There is no deceptive arrangement or manipulative purpose. What is the sound conclusion?
Matching alone is insufficient because ordinary exchange trading also matches genuine independent orders. Remember: Assess intention, relationships and economic substance before concluding manipulation.
Hint Common mistake: Calling every synchronised-looking or matched trade fraudulent. Separate normal market matching from evidence of a manipulative arrangement.
III-A-070Practice bank se · 8
A person deliberately hides a material fact to induce a securities transaction. No explicit false statement is spoken. Can the conduct still constitute fraud?
Deliberate deceptive concealment can fall within fraud even without an express spoken falsehood. Remember: Fraud can involve deceptive acts, omissions or concealment.
Hint Common mistake: Looking only for a false sentence and overlooking a deceptive omission. Consider whether deception can occur through omission as well as words.
III-A-071Practice bank se · 9
A trader places small aggressive trades near the close solely to distort the closing price used for portfolio valuation. Which issue is central?
The central issue is closing-price manipulation because the trades are intended to create an artificial valuation reference. Remember: Genuine execution does not excuse a scheme to distort a market price.
Hint Common mistake: Assuming a price is reliable merely because a trade printed at that price. Consider the purpose behind the trades and the benchmark they affect.
III-A-072