Non-Financial Transactions
11 questions. Each answer is explained.
Question 1 of 10Practice · Series II-B — Registrars to an Issue and Share Transfer Agents - Mutual Fund
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Learn these topics
More units in NISM Series II-B
- Introduction to Securities5
- Characteristic of Equities7
- Characteristics of Debt Securities7
- Characteristics of Other Securities5
- SEBI- Role and Regulations6
- Basics of Registrars and Transfer Agents12
- Registrars and Transfer Agents Regulations12
- Basics of Mutual Funds14
- Structure and Constituents of Mutual Funds11
- Mutual Fund Products12
- Operational Concepts of Mutual Funds14
- Investors in Mutual Funds10
- Banking Operations in Mutual Funds12
- Financial Transactions12
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 | 30 of 100 marks (30%) |
That figure belongs to one published unit covered under these headings — Non-Financial Transactions and Investors in Mutual Funds and Banking Operations in Mutual Funds and Financial Transactions — so the marks belong to the whole group. They are quoted together because no source divides them among its headings.
Source: March 2025 Annexure I, Units 12 to 15 (Investors in Mutual Funds to Non-Financial Transactions): 30%
NISM Series II-B Registrars to an Issue and Share Transfer Agents - Mutual Fund
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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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 11 questions on Non-Financial Transactions, with answers
Q1Which activity is normally a non-financial mutual fund transaction?
Option A. Updating a registered correspondence address — Correct answer
Option B. Redeeming mutual fund units for a cash payout
Why it is wrong: A redemption is a financial transaction.
Option C. Switching between two schemes of the same fund
Why it is wrong: A switch changes financial holdings.
Option D. Buying additional fund units in an existing folio
Why it is wrong: A purchase is a financial transaction.
Answer: A. An address update changes investor details without itself creating a purchase or redemption.
Hint, shown before you answer in practice mode: Think about changes to records without buying or selling units.
II-B-140easyconceptual
Q2Why should an RTA verify documents before changing an investor's registered name?
Option A. To change the scheme's market benchmark to match the investor's new name
Why it is wrong: Benchmark change is unrelated to personal identity.
Option B. To ensure the request reflects authorised and supported identity changes — Correct answer
Option C. To guarantee an improved scheme return after the name change is recorded
Why it is wrong: Name verification cannot affect investment return.
Option D. To select the fund's securities based on the investor's updated profile
Why it is wrong: Portfolio decisions belong to investment management.
Answer: B. Name-change verification helps protect the accuracy and ownership integrity of investor records.
Hint, shown before you answer in practice mode: Think about identity integrity and impersonation risk.
II-B-141mediumconceptual
Q3What is the usual purpose of registering multiple valid bank mandates?
Option A. Guarantee same-day redemption in all cases
Why it is wrong: Payout timing follows scheme and banking rules.
Option B. Automatically invest in every linked bank's shares
Why it is wrong: Bank details do not direct investment into bank equities.
Option C. Maintain approved accounts for eligible investor payments — Correct answer
Option D. Avoid every future identity check
Why it is wrong: Multiple mandates do not eliminate controls.
Answer: C. Registered mandates identify eligible investor bank accounts under applicable payment controls.
Hint, shown before you answer in practice mode: Think about which bank accounts may receive authorised payouts.
II-B-142mediumconceptual
Q4An investor asks to change the registered mobile number. Which action best protects the folio?
Option A. Change the nominee without any instruction from the investor
Why it is wrong: A contact update does not authorise nomination changes.
Option B. Accept any caller who knows the folio number and the investor's name
Why it is wrong: A folio number alone is insufficient authentication.
Option C. Share an account password by public message to confirm the change
Why it is wrong: Publicly sending passwords exposes accounts.
Option D. Authenticate the investor and record the authorised contact update — Correct answer
Answer: D. The RTA should verify authority before changing sensitive contact information.
Hint, shown before you answer in practice mode: Consider both identity checking and audit logging.
II-B-143mediumapplication
Q5What does transmission of mutual fund units mean?
Option A. Transfer of holdings following the holder's death under applicable procedures — Correct answer
Option B. A regular monthly SIP contribution made from the investor's bank account
Why it is wrong: A SIP adds investments rather than transmits ownership.
Option C. Routine sale of units at current NAV by the holder through a redemption request
Why it is wrong: Redemption is a sale, not transmission.
Option D. Movement of money from one bank to another through an electronic transfer
Why it is wrong: Bank transfers do not describe unit transmission.
Answer: A. Transmission is the recognised process for recording eligible successors or claimants following an investor's death.
Hint, shown before you answer in practice mode: Think about succession following death.
II-B-144mediumconceptual
Q6Why might an RTA mark a lien against mutual fund units?
Option A. To raise the NAV for one investor holding the pledged units
Why it is wrong: A lien does not alter the scheme NAV.
Option B. To record a valid encumbrance restricting permitted disposal — Correct answer
Option C. To guarantee a tax refund to the investor at year end
Why it is wrong: A lien is not a tax relief mechanism.
Option D. To cancel every unit in the folio once the loan is approved
Why it is wrong: A lien does not itself mean holdings are cancelled.
Answer: B. Lien marking records a legal restriction or interest in specified units according to valid instructions.
Hint, shown before you answer in practice mode: Think about units given as security for an obligation.
II-B-145mediumconceptual
Q7A pledgee requests release of pledged units but the required release authority is absent. What should the RTA do?
Option A. Remove the lien immediately on an informal call from the pledgee
Why it is wrong: Informal requests may not satisfy release requirements.
Option B. Transfer the units to the registrar's own account until it is resolved
Why it is wrong: Registrar ownership would be unauthorised.
Option C. Keep the restriction until valid release instructions are verified — Correct answer
Option D. Change the scheme NAV to offset the value of the pledged units
Why it is wrong: Unit valuation cannot replace release authority.
Answer: C. A lien or pledge restriction should only be released after appropriate authority and verification.
Hint, shown before you answer in practice mode: Think about who may authorise removing a restriction.
II-B-146hardapplication
Q8What is a common reason to update a corporate mutual fund folio's signatory list?
Option A. A rise in the scheme's NAV since the last update
Why it is wrong: Unit price changes do not grant signature authority.
Option B. A fall in market trading volume on the exchange
Why it is wrong: Market volume does not amend corporate mandates.
Option C. A change in the name of the scheme's market index
Why it is wrong: Index renaming does not establish corporate signatories.
Option D. A change in the entity's authorised representatives — Correct answer
Answer: D. Changes to authorised representatives require updated corporate authority records.
Hint, shown before you answer in practice mode: Think about governance changes within an institution.
II-B-147mediumconceptual
Q9What is the purpose of an investor grievance system?
Option A. Receive, track and resolve complaints through defined channels — Correct answer
Option B. Guarantee stock market gains to every complaining investor
Why it is wrong: Grievance channels cannot control security prices.
Option C. Replace all regulatory requirements on investor service
Why it is wrong: Complaints handling supplements compliance obligations.
Option D. Determine the fund's portfolio allocation across sectors
Why it is wrong: Complaint systems are not investment selection tools.
Answer: A. A grievance system supports documented receipt, escalation and resolution of investor complaints.
Hint, shown before you answer in practice mode: Think about traceable resolution of investor problems.
II-B-148easyconceptual
Q10What is the function of SEBI's SCORES mechanism?
Option A. Fix the interest rate paid by debt funds to their investors
Why it is wrong: Regulatory complaint handling does not determine market yields.
Option B. Provide a securities investor complaint redressal platform — Correct answer
Option C. Replace the RTA's investor account register for all schemes
Why it is wrong: Complaints do not replace holdings records.
Option D. Act as a bank payment gateway for mutual fund purchases
Why it is wrong: SCORES is not used to transfer investment money.
Answer: B. SCORES is SEBI's platform for securities-market investor complaint redressal.
Hint, shown before you answer in practice mode: Recall where unresolved investor complaints can be escalated.
II-B-149mediumconceptual
Q11A claimant reports a deceased investor's units, but records show two folios. What should an RTA do?
Option A. Cancel both folios without investigation and close the claim at once
Why it is wrong: Cancellation may destroy valid holdings.
Option B. Send the units to the first person who phones the investor service centre
Why it is wrong: Telephone priority does not establish entitlement.
Option C. Verify documents and handle transmission separately against each relevant folio — Correct answer
Option D. Transfer every account with a similar name immediately to the claimant
Why it is wrong: Matching names alone cannot establish legal claim.
Answer: C. Each folio requires proper identification, supporting claim documents and authorised transmission processing.
Hint, shown before you answer in practice mode: Consider legal entitlement and accurate account-by-account records.
II-B-150hardapplication
Non-Financial Transactions: common questions
How many practice questions are there on Non-Financial Transactions?
11 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-B, which has 150 questions in total.
Are these real NISM Series II-B questions on Non-Financial Transactions?
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-B exam is Non-Financial Transactions?
NISM's published syllabus outline gives it 30 of the paper's 100 marks, or 30% of the exam. That figure covers one published unit taught here under more than one heading (Non-Financial Transactions and Investors in Mutual Funds and Banking Operations in Mutual Funds and Financial Transactions). So it is the marks for the group, not for this page alone. No source splits it, so it is not split here. The published unit it comes from: March 2025 Annexure I, Units 12 to 15 (Investors in Mutual Funds to Non-Financial Transactions): 30%
Does negative marking apply to NISM Series II-B?
No. NISM applies no negative marking to Series II-B. 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.
Try a paper on all of NISM Series II-B
This is the last unit of Registrars to an Issue and Share Transfer Agents - Mutual Fund. The series page runs one quiz across every unit.
Open the NISM Series II-B practice pagePaper Trading Try it on the practice trading desk