SEBI – Role and Regulations
10 questions. Each answer is explained.
Question 1 of 10Practice · Series II-A — Registrars to an Issue and Share Transfer Agents - Corporate
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Learn these topics
More units in NISM Series II-A
- Introduction to Securities10
- Characteristics of Equity Shares10
- Characteristics of Debt Securities10
- Characteristics of Other Securities10
- Basics of Mutual Funds10
- Public Offer of Securities10
- Modes of allotment of shares other than Public Offers10
- Processes related to Public Offering of Shares10
- Roles and Responsibilities in a Public Issue10
- Depository Services10
- Processes Related to Depositories10
- Investor Interface with the R&T Agent10
- Secondary Market Transactions10
- Client Servicing10
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 50% · 50 of 100 marks |
| Negative marking | None · a wrong answer costs nothing beyond the mark |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | 14 of 100 marks (14%) |
Source: March 2025 Annexure I, Unit 6: SEBI- Role and Regulations
NISM Series II-A Registrars to an Issue and Share Transfer Agents - Corporate
Exam rules read on NISM's site on 31 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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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 31 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.
All 10 questions on SEBI – Role and Regulations, with answers
Q1Which objective is part of SEBI’s role in the Indian securities market?
Option A. Guaranteeing profits for investors on every listed security
Why it is wrong: Regulation does not guarantee that investments will be profitable.
Option B. Fixing the dividend paid by every listed company in India
Why it is wrong: Companies determine dividends through their applicable governance process.
Option C. Paying the market losses of every shareholder in India
Why it is wrong: SEBI does not promise to reimburse every investment loss.
Option D. Protecting investors and regulating the securities market — Correct answer
Answer: D. Protecting investors and regulating the securities market is part of SEBI’s role, alongside promoting market development. Remember: Market regulation protects market integrity, not each investment’s return.
Hint, shown before you answer in practice mode: A market regulator sets and enforces safeguards rather than eliminating investment risk. Common mistake: Assuming investor protection means compensation for every market loss.
II-A-051easyregulatory
Q2Which SEBI RTA regulation set replaced the 1993 regulations when the new framework commenced?
Option A. The RTA Regulations, 2008
Why it is wrong: 2008 is not the replacement year specified in that provision.
Option B. The RTA Regulations, 2018
Why it is wrong: 2018 is not the replacement year specified in that provision.
Option C. The RTA Regulations, 2003
Why it is wrong: 2003 is not the replacement year specified in the RTA repeal provision.
Option D. The RTA Regulations, 2025 — Correct answer
Answer: D. The RTA Regulations, 2025 replaced the 1993 regulations through their express repeal and savings provision. Remember: Use the applicable regulatory framework even when a syllabus page retains an older reference.
Hint, shown before you answer in practice mode: Check the express repeal provision rather than relying only on the older syllabus reference. Common mistake: Memorising the old regulation year without checking whether it was replaced.
II-A-052easyregulatory
Q3Who must register an entity before it acts as a registrar to an issue and share transfer agent?
Option A. Securities and Exchange Board of India — Correct answer
Option B. Reserve Bank of India
Why it is wrong: The Reserve Bank of India does not grant the RTA registration required by the cited securities-market framework.
Option C. Insurance Regulatory and Development Authority of India
Why it is wrong: The insurance regulator is not the authority granting registration under the cited RTA framework.
Option D. Pension Fund Regulatory and Development Authority
Why it is wrong: The pension regulator is not the authority granting registration under the cited RTA framework.
Answer: A. SEBI registration is required before an entity acts as a registrar to an issue and share transfer agent. Remember: An RTA’s appointment by an issuer does not replace regulatory registration.
Hint, shown before you answer in practice mode: Look for the authority regulating securities-market intermediaries. Common mistake: Assuming an issuer contract alone authorises RTA business.
II-A-053easyregulatory
Q4Under regulation 18 of the RTA Regulations, 2025, what is the minimum record-preservation period, subject to other law?
Option A. 3 years
Why it is wrong: 3 years confuses record retention with other regulatory periods.
Option B. 5 years
Why it is wrong: 5 years understates the minimum in the cited RTA regulation.
Option C. 8 years — Correct answer
Option D. 10 years
Why it is wrong: 10 years is not the minimum specified in regulation 18, although other obligations may require longer retention.
Answer: C. The minimum period is 8 years under regulation 18, subject to requirements under other applicable law. Remember: Prescribed RTA records have an eight-year regulatory minimum under the cited rule.
Hint, shown before you answer in practice mode: The question concerns retention of prescribed records, not certificate validity. Common mistake: Applying a familiar retention period from a different regulation.
II-A-054mediumregulatory
Q5Under regulation 21(1) of the RTA Regulations, 2025, what is the outer limit for redressing a received investor grievance?
Option A. 60 working days
Why it is wrong: 60 working days is not the specified grievance-redressal period.
Option B. 21 working days
Why it is wrong: Working days exclude some days and are not the period stated in the rule.
Option C. 30 calendar days
Why it is wrong: 30 calendar days exceeds the specified limit.
Option D. 21 calendar days — Correct answer
Answer: D. The outer limit is 21 calendar days from receipt under regulation 21(1), while grievances must still be addressed promptly. Remember: The cited grievance deadline is in calendar days, not working days.
Hint, shown before you answer in practice mode: Pay attention to both the number and the type of days. Common mistake: Replacing calendar days with working days when tracking complaints.
II-A-055mediumregulatory
Q6A caller requests confidential client information from an RTA. The client has not authorised disclosure and no law requires it. What should the RTA do?
Option A. Decline the disclosure and protect confidentiality — Correct answer
Option B. Share it because the caller sounds professional
Why it is wrong: A professional manner does not establish permission to receive confidential information.
Option C. Share it after removing only the client’s first name
Why it is wrong: Removing a first name does not necessarily prevent identification or authorise disclosure.
Option D. Publish it so every caller has equal access
Why it is wrong: Publishing confidential information expands rather than resolves the breach.
Answer: A. The RTA should decline disclosure because the code permits disclosure of confidential client information only with client authority or a legal requirement. Remember: Confidential information requires a valid basis for disclosure.
Hint, shown before you answer in practice mode: Courtesy and confidence on the phone do not establish authority to receive private information. Common mistake: Treating familiarity or a confident request as client authorisation.
II-A-056mediumapplication
Q7An RTA controls exactly 10% of an issuer’s voting rights. It is asked to handle that issuer’s securities issue. What does regulation 16 imply?
Option A. It is an associate and cannot act for that issue — Correct answer
Option B. It may act because only direct share count matters
Why it is wrong: The rule addresses direct or indirect voting-right control, not merely a simple share-count test.
Option C. It may act if the issuer verbally agrees
Why it is wrong: Issuer consent does not remove the regulatory prohibition.
Option D. It may act because the holding is below 15%
Why it is wrong: 15% is not the threshold in the cited association test.
Answer: A. The RTA is an associate and cannot act for that issue because regulation 16 includes control of not less than 10% of voting rights. Remember: Exactly 10% meets a threshold expressed as not less than 10%.
Hint, shown before you answer in practice mode: The rule tests voting-right control and includes its stated threshold. Common mistake: Reading an inclusive threshold as strictly above the stated percentage.
II-A-057mediumapplication
Q8An issuer proposes an RTA contract that waives the RTA’s statutory investor obligations. Which response is appropriate?
Option A. Accept it if the issuer pays a higher fee
Why it is wrong: A higher fee does not justify weakening investor protections.
Option B. Replace the waiver with an oral understanding
Why it is wrong: Making an unlawful waiver oral does not make it acceptable.
Option C. Accept it because both parties can waive any rule
Why it is wrong: Mutual agreement does not override mandatory legal duties.
Option D. Reject the waiver and preserve legal obligations — Correct answer
Answer: D. The RTA should reject the waiver because the agreement must not diminish either party’s statutory and regulatory obligations. Remember: An issuer agreement should allocate work without reducing legal responsibilities.
Hint, shown before you answer in practice mode: A private agreement cannot simply remove duties imposed by law. Common mistake: Assuming contract wording can override securities law.
II-A-058mediumapplication
Q9An employee reports suspected fraud by the RTA’s chief executive under its whistle-blower policy. Which internal recipient is specified for this complaint?
Option A. Only the chief executive named in the complaint
Why it is wrong: Routing the complaint only to its subject defeats the specified independent escalation route.
Option B. Only the issuer whose shares the RTA services
Why it is wrong: An external issuer is not the internal recipient specified by regulation 26(3).
Option C. Only the sales manager supervising new accounts
Why it is wrong: The sales manager is not the recipient specified for a chief-executive complaint.
Option D. The audit committee or equivalent body — Correct answer
Answer: D. The audit committee or equivalent body is the specified recipient for a whistle-blower complaint against the chief executive under regulation 26(3). Remember: Whistle-blower escalation depends on the position of the person complained against.
Hint, shown before you answer in practice mode: The escalation route must avoid leaving a senior executive to control a complaint against themselves. Common mistake: Using the ordinary employee complaint route for allegations against top management.
II-A-059hardapplication
Q10An RTA’s managers argue that the compliance officer alone must establish all anti-fraud controls. Which allocation best matches regulation 23?
Option A. The issuer establishes controls and the RTA only stores the reports
Why it is wrong: The RTA cannot transfer responsibility for its internal controls entirely to an issuer.
Option B. The external investor establishes controls and the audit committee approves each trade
Why it is wrong: Individual investors do not establish the RTA’s institutional control system.
Option C. Senior management establishes controls and the compliance officer monitors them — Correct answer
Option D. The compliance officer establishes controls and directors have no oversight role
Why it is wrong: The regulation also places responsibility on senior management and oversight bodies.
Answer: C. Senior management establishes and maintains controls while the compliance officer monitors them, with board oversight and audit-committee review under regulation 23. Remember: Control ownership, compliance monitoring and governance oversight are separate responsibilities.
Hint, shown before you answer in practice mode: Distinguish responsibility for creating controls from monitoring and oversight. Common mistake: Assigning every anti-fraud responsibility to the compliance officer alone.
II-A-060hardapplication
SEBI – Role and Regulations: common questions
How many practice questions are there on SEBI – Role and Regulations?
10 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 15 practice topics for NISM Series II-A, which has 150 questions in total.
Are these real NISM Series II-A questions on SEBI – Role and Regulations?
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 much of the NISM Series II-A exam is SEBI – Role and Regulations?
NISM's published syllabus outline gives it 14 of the paper's 100 marks, or 14% of the exam. It is quoted from the outline, not estimated. The published unit it comes from: March 2025 Annexure I, Unit 6: SEBI- Role and Regulations
Does negative marking apply to NISM Series II-A?
No. NISM applies no negative marking to Series II-A. 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.
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.
Public Offer of Securities
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