Series XIINew
Securities Markets Foundation
50 questionsPass mark 60%Negative marking None
NISM Series XII practice questions
150 questions. Each answer is explained.
Question 1 of 10Practice · Series XII — Securities Markets Foundation
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Practise one unit at a time
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 60% · 60 of 100 marks |
| Negative marking | None · a wrong answer costs nothing beyond the mark |
| Certificate validity | 3 years · from the date of the examination |
NISM Series XII Securities Markets Foundation
Exam rules read on NISM's site on 17 October 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 17 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
5 sample questions with answers
The other 145 are on the unit pages above, written out the same way.
Q1What does price discovery in a securities market mainly describe?
Option A. Prices rising whenever a company releases any information
Why it is wrong: New information can raise or lower a security’s price.
Option B. Prices being fixed permanently by the original issuer
Why it is wrong: Issue prices do not permanently fix secondary-market prices.
Option C. Prices being equal for all securities of different companies
Why it is wrong: Different securities have different risks and expected cash flows.
Option D. Prices emerging from interacting buy and sell interest — Correct answer
Answer: D. Price discovery is the process through which buying and selling interest helps establish market prices. Remember: Market prices reflect interactions among buyers and sellers.
Hint, shown before you answer in practice mode: Common mistake: Treating a discovered market price as a guaranteed fair value. Think about how competing orders arrive at a traded price.
XII-008mediumconceptual
Q2A portfolio has ₹1.2 lakh in equity and ₹80,000 in debt. What percentage is allocated to equity?
Option A. 150%
Why it is wrong: This divides equity by debt instead of by the whole portfolio.
Option B. 60% — Correct answer
Option C. 40%
Why it is wrong: This is the debt weight rather than the equity weight.
Option D. 66.67%
Why it is wrong: This does not use the stated total portfolio value of ₹2 lakh.
Answer: B. The equity allocation is 60% of the portfolio. Total = ₹1,20,000 + ₹80,000 = ₹2,00,000. Equity weight = ₹1,20,000 ÷ ₹2,00,000 × 100 = 60%. Remember: An asset weight uses total portfolio value as its denominator.
Hint, shown before you answer in practice mode: Common mistake: Dividing one asset class by another instead of by the total. Calculate the total portfolio value before finding its equity share.
XII-031mediumnumerical
Q3Under Applications Supported by Blocked Amount, what happens initially to the money authorised for an issue application?
Option A. It is deducted permanently as an application charge
Why it is wrong: The authorised application amount is not a non-refundable fee.
Option B. It is blocked in the applicant’s bank account — Correct answer
Option C. It is transferred to the issuer before any allotment
Why it is wrong: Initial blocking reserves the amount rather than transferring it to the issuer immediately.
Option D. It remains freely withdrawable until shares are allotted
Why it is wrong: A blocked amount is not freely available for withdrawal while the block remains.
Answer: B. Applications Supported by Blocked Amount reserves the authorised money in the applicant’s bank account. The allotment outcome determines the subsequent debit or release. Remember: Blocked application money is reserved pending the issue outcome.
Hint, shown before you answer in practice mode: Common mistake: Assuming all application money leaves the bank account immediately. Distinguish reserving money from transferring it immediately.
XII-061mediumconceptual
Q4For the same share and settlement, 120 bought shares and 45 sold shares are eligible for netting. What is the net securities receivable?
Option A. 75 shares — Correct answer
Option B. 120 shares
Why it is wrong: The gross purchase quantity ignores the sale obligation.
Option C. 165 shares
Why it is wrong: Adding the quantities ignores the offset from sales.
Option D. 45 shares
Why it is wrong: This is the gross sale quantity rather than the net receivable.
Answer: A. The net receivable is 75 shares under the stated netting assumption. Net quantity = 120 bought − 45 sold = 75 shares. Remember: Eligible opposite obligations can be offset within the same settlement.
Hint, shown before you answer in practice mode: Common mistake: Applying netting without checking that the trades are eligible. Offset the eligible sale quantity against the purchase quantity.
XII-091mediumnumerical
Q5What cost difference generally explains a direct plan’s lower expenses than the regular plan of the same mutual fund scheme?
Option A. Absence of every management expense in the direct plan
Why it is wrong: A direct plan can still bear management and other scheme expenses.
Option B. A different risk-free portfolio for the direct plan
Why it is wrong: The distribution route does not replace the underlying scheme portfolio with risk-free assets.
Option C. A guaranteed fixed net asset value for the direct plan
Why it is wrong: A direct plan’s net asset value can change and is not fixed by its distribution route.
Option D. Absence of distributor commission in the direct plan — Correct answer
Answer: D. A direct plan excludes distributor commission and therefore generally has lower expenses than the regular plan of the same scheme. It can still have other scheme expenses. Remember: Direct plans reduce distribution-related cost rather than eliminate all costs.
Hint, shown before you answer in practice mode: Common mistake: Treating a lower expense ratio as zero expenses. Consider which distribution service differs between the two purchase routes.
XII-121mediumconceptual
NISM Series XII practice: common questions
Are these the real NISM Series XII exam questions?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
How many practice questions are there for NISM Series XII?
150 at the moment, across 6 practice topics, with one page per unit. It is a practice set, not a copy of the paper: the real NISM-Series-XII: Securities Markets Foundation Certification Examination has 100 questions.
Where are all the questions and answers?
On the 6 practice topics listed above. There are 5 in full. Each unit's page has the rest, with all four options, the correct answer and why each other option is wrong.
Does negative marking apply to NISM Series XII?
No. NISM applies no negative marking to Series XII. A wrong answer costs nothing beyond the mark you did not earn, so a blank is never better than an attempt. Timed practice here uses the same rule.
How do I book the NISM Series XII exam?
You register and pay on NISM's own website, nism.ac.in. The steps and the fee change from time to time, so read them there on the day you book.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
See the exam these questions follow
The Securities Markets Foundation exam page shows the question count, the time, the pass mark and the marking rule.
Open the NISM Series XII exam pagePaper Trading Try it on the practice trading desk