Unit ko samjho · NISM Series IV
Code of Conduct and Investor Protection Measures in Interest Rate Derivatives
6 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
- A client’s written authorisation permits a broker only to transfer specified securities for settlement of the client’s instructed trades. The broker relies on it to initiate unrelated speculative IRD trades without instructions. Is that activity within the authority described?
- What is the principal operational purpose of linking verified client identity with a unique client code when processing IRD trades?
- Which statement should a prospective interest-rate-futures client understand before trading?
- After a client approaches the intermediary about a disputed IRD transaction, the dispute remains unresolved and subsequent conciliation is unsuccessful. Which statement correctly distinguishes available redressal functions?
- A client compares two cases: an admitted claim after a member’s default with insufficient member assets, and an ordinary loss on a correctly executed futures trade. Which statement best describes the Investor Protection Fund’s purpose?
- Under the AML reporting topic specified in the Series IV objectives, Suspicious Transaction Reports are directed to which Indian body?
Zaroori ideas
Practice bank se · 1
A client’s written authorisation permits a broker only to transfer specified securities for settlement of the client’s instructed trades. The broker relies on it to initiate unrelated speculative IRD trades without instructions. Is that activity within the authority described?
The scope given in the question is limited to settlement transfers for instructed transactions. Starting new speculative trades is a different act and is not authorised by that wording. The answer rests on the explicit document scope. It does not invent a mandatory PoA format or claim that every client must execute a PoA. Remember: Read the actual scope of an authorisation rather than infer unlimited powers from its existence.
Hint Common mistake: Treating a settlement-related authority as blanket discretionary trading permission.
IV-145Practice bank se · 2
What is the principal operational purpose of linking verified client identity with a unique client code when processing IRD trades?
KYC establishes who the client is, while a unique client identifier helps connect transactions and obligations to that client in operational records. These controls assist proper allocation and oversight, but do not substitute for investment judgement or clearing safeguards. No specific document list or verification deadline is assumed in this item. Remember: Identification, trade attribution and collection are complementary controls.
Hint Common mistake: Assuming successful onboarding removes the risks or obligations of later trades.
IV-146Practice bank se · 3
Which statement should a prospective interest-rate-futures client understand before trading?
Risk disclosure should communicate economically relevant risks, including leverage, adverse price changes and the need to fund settlement payments. A signature is not a guarantee, and closing before does not ensure a favourable price. Understanding the obligation structure matters more than treating disclosure as a formality at account opening. Remember: Risk disclosure must explain the consequences of the product, not simply collect an acknowledgement.
Hint Common mistake: Equating the cash initially deposited with the maximum possible exposure.
IV-147Practice bank se · 4
After a client approaches the intermediary about a disputed IRD transaction, the dispute remains unresolved and subsequent conciliation is unsuccessful. Which statement correctly distinguishes available redressal functions?
SEBI’s SCORES framework asks investors to approach the concerned entity first and supports eligible complaint redressal. NSE’s described ODR process provides for arbitration after unresolved conciliation. Neither step is an automatic compensation award. The proper route and outcome depend on the dispute’s eligibility, facts and applicable procedure. No unverified deadline is asserted here. Remember: Use the relevant complaint and dispute-resolution route rather than treat redressal as a guaranteed reimbursement.
Hint Common mistake: Confusing a grievance’s registration with a determination that the claim is payable.
IV-148Practice bank se · 5
A client compares two cases: an admitted claim after a member’s default with insufficient member assets, and an ordinary loss on a correctly executed futures trade. Which statement best describes the Investor Protection Fund’s purpose?
The inspected NSE description links IPF assistance to admitted claims where a defaulting or expelled member’s assets are insufficient, subject to the framework. A normal market loss is a different event. The question does not quote a compensation ceiling because eligibility, current limits and the precise claim circumstances must be checked separately. Remember: Investor protection funds address defined failures, not unsuccessful investment decisions.
Hint Common mistake: Assuming “investor protection” means all capital or trading outcomes are guaranteed.
IV-149Practice bank se · 6
Under the AML reporting topic specified in the Series IV objectives, Suspicious Transaction Reports are directed to which Indian body?
The official NISM objective expressly includes Suspicious Transaction Reporting to the Financial Intelligence Unit. The item tests the recipient, not whether a particular trade is suspicious, who may disclose a report, or the filing deadline. Those procedural questions require the applicable AML rules and entity-specific compliance process rather than inference from the term STR. Remember: Distinguish statutory AML reporting from market research, rating and issuer communication.
Hint Common mistake: Sending a regulatory report to a market-service provider instead of the specified authority.
IV-150Margin is the money a participant must keep in place to carry a leveraged position.
Aage padhoExpiry day is the last day on which a derivative contract can be traded.
Aage padho