Unit ko samjho · NISM Series VI
Special Services – Pledge & Hypothecation
12 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
- Rohini offers her demat shares as security for a loan from a lender. In the pledge arrangement, which pairing is correct?
- A borrower’s DP has entered an ordinary CDSL pledge request and generated its reference. What additional stage is needed to complete the pledge through the standard process?
- For an ordinary pledge recorded within CDSL, the borrower and lender maintain CDSL BO accounts with different DPs. Does the different-DP arrangement alone prevent the pledge?
- After an ordinary pledge is validly created but before invocation, how is the pledged quantity ordinarily reflected?
- A CDSL pledge is accepted. The borrower asks the DP to disburse the loan because the collateral is now recorded. Which response is correct?
- An accepted pledge covers 800 shares. The required parties complete a valid partial release of 300 shares, with no other change. How many shares remain pledged?
- Under the ordinary CDSL pledge process, the lender agrees to release its security interest. Which facility is relevant when the pledgee initiates release through its own DP?
- A valid ordinary CDSL pledge is invoked by the pledgee in accordance with the agreement and applicable procedure. Which depository movement results for the invoked quantity?
- Locked-in demat shares are accepted under an ordinary pledge. The lender wants to invoke them before the lock-in expires. Which principle applies?
- A lender values accepted collateral at ₹2,40,000 and applies a stated 25% haircut. Ignoring all other limits, what collateral value remains after the haircut?
- A broker asks a client to transfer shares outright to its own account merely to provide trading margin. Which alternative reflects SEBI’s securities-as-margin framework?
- What is the central distinction of a Non-Disposal Undertaking recorded through the prescribed depository mechanism?
Zaroori ideas
Practice bank se · 1
Rohini offers her demat shares as security for a loan from a lender. In the pledge arrangement, which pairing is correct?
The pledgor provides securities as collateral, while the pledgee receives the security interest. The DP and depository record and process the arrangement under their rules. They do not become the borrower or lender simply by providing that service. Getting the roles right is essential when checking who can initiate creation, release or invocation. Remember: Pledgor provides the collateral. Pledgee receives the security interest.
Hint Common mistake: Confusing the intermediary that records a pledge with the party benefiting from it.
VI-111Practice bank se · 2
A borrower’s DP has entered an ordinary CDSL pledge request and generated its reference. What additional stage is needed to complete the pledge through the standard process?
Creation is not simply the borrower’s uncompleted proposal. The ordinary CDSL process includes the pledgee’s acceptance or confirmation through the relevant DP/system route. The recorded status must therefore be checked before treating a proposed encumbrance as a completed accepted pledge. Remember: A request reference is not necessarily evidence of final accepted status.
Hint Common mistake: Treating pledge setup as complete before the pledgee has accepted.
VI-112Practice bank se · 3
For an ordinary pledge recorded within CDSL, the borrower and lender maintain CDSL BO accounts with different DPs. Does the different-DP arrangement alone prevent the pledge?
The CDSL FAQ requires the relevant BO accounts within its system but does not require the same DP for both parties. A common depository and correct account identification support the process. This question is limited to the specified ordinary CDSL pledge and does not invent a cross-depository pledge mechanism. Remember: Same depository need not mean same participant.
Hint Common mistake: Adding a same-branch requirement that the process does not contain.
VI-113Practice bank se · 4
After an ordinary pledge is validly created but before invocation, how is the pledged quantity ordinarily reflected?
A pledge records a security interest and restricts the affected electronic quantity. Ordinary creation is distinct from invocation: it does not itself mean that the lender has received an unrestricted ownership credit. The account and pledge records preserve the distinction between beneficial holding and encumbrance. Remember: Pledge creation and pledge invocation produce different operational states.
Hint Common mistake: Treating a collateral block as though it were already an outright transfer.
VI-114Practice bank se · 5
A CDSL pledge is accepted. The borrower asks the DP to disburse the loan because the collateral is now recorded. Which response is correct?
The depository mechanism records the pledge. The loan amount, interest, eligibility of collateral and disbursement depend on the lender’s agreement and credit process. A successful pledge entry is not a loan sanction by the DP or a promise that the full market value will be advanced. Remember: The securities leg and cash-loan agreement are related but separate processes.
Hint Common mistake: Assuming a completed pledge itself guarantees loan approval.
VI-115Practice bank se · 6
An accepted pledge covers 800 shares. The required parties complete a valid partial release of 300 shares, with no other change. How many shares remain pledged?
The release reduces the encumbered quantity: 800 − 300 = 500 remain pledged. Partial release need not close the entire pledge. The released quantity must still be checked for any independent restriction before treating it as freely transferable. Remember: A partial release changes the encumbered quantity without necessarily ending the entire arrangement.
Hint Common mistake: Removing the whole pledge when only part of the collateral was released.
VI-116Practice bank se · 7
Under the ordinary CDSL pledge process, the lender agrees to release its security interest. Which facility is relevant when the pledgee initiates release through its own DP?
The ordinary process permits the pledgee to release the pledge through its DP under the relevant unpledge facility. This is a relinquishment of the lender’s recorded interest, not invocation or acquisition of the securities. It should not be confused with a borrower attempting to cancel collateral without the secured party’s required consent. Remember: Identify who is giving up an existing security interest.
Hint Common mistake: Confusing pledgee-initiated release with pledgee-initiated invocation.
VI-117Practice bank se · 8
A valid ordinary CDSL pledge is invoked by the pledgee in accordance with the agreement and applicable procedure. Which depository movement results for the invoked quantity?
Ordinary invocation enforces the recorded pledge by moving the affected quantity to the pledgee’s account under the applicable process. It differs from unpledge, which removes the security interest without that enforcement transfer. Special broker-margin arrangements have their own rules and should not be substituted for the ordinary pledge scenario stated here. Remember: Unpledge removes the encumbrance. Invocation enforces it through the prescribed transfer.
Hint Common mistake: Using the release workflow when the instruction is actually to invoke.
VI-118Practice bank se · 9
Locked-in demat shares are accepted under an ordinary pledge. The lender wants to invoke them before the lock-in expires. Which principle applies?
The cited ordinary CDSL process permits pledge of locked-in securities but recognises the lock-in constraint on invocation. A contractual collateral arrangement is not a licence to evade a restriction on the securities. Both eligibility for creation and conditions for later enforcement must be checked. Remember: The ability to create a pledge does not imply an unrestricted ability to enforce it immediately.
Hint Common mistake: Assuming every technically accepted collateral item can be sold at once.
VI-119Practice bank se · 10
A lender values accepted collateral at ₹2,40,000 and applies a stated 25% haircut. Ignoring all other limits, what collateral value remains after the haircut?
The haircut is ₹2,40,000 × 25% = ₹60,000. Eligible value after this stated adjustment is ₹2,40,000 − ₹60,000 = ₹1,80,000. This is a hypothetical lender policy, not a universal depository lending ratio. Loan approval and other limits can still reduce the amount actually advanced. Remember: After-haircut value equals market value multiplied by one minus the haircut rate.
Hint Common mistake: Calling the haircut amount the permitted lending value.
VI-120Practice bank se · 11
A broker asks a client to transfer shares outright to its own account merely to provide trading margin. Which alternative reflects SEBI’s securities-as-margin framework?
SEBI’s framework requires securities accepted as margin to use the prescribed pledge mechanism in the depository system. The purpose is to record and control the collateral chain rather than convert client holdings into an unrestricted broker-owned asset. The mechanism does not remove market, valuation or shortfall risk. Remember: Use the designated collateral mechanism for margin, not an unexplained ownership transfer.
Hint Common mistake: Treating delivery to a broker account as the only way to provide securities margin.
VI-121Practice bank se · 12
What is the central distinction of a Non-Disposal Undertaking recorded through the prescribed depository mechanism?
An NDU is an undertaking not to dispose of identified securities, implemented through the relevant system controls. It should not automatically be equated with a pledge that provides the ordinary pledgee invocation mechanism. Its exact release and enforcement arrangements follow the applicable NDU procedure and agreement. Remember: Distinguish different encumbrance types rather than calling every block a pledge.
Hint Common mistake: Assuming all blocked balances give the beneficiary identical enforcement rights.
VI-122