SEBI (Debenture Trustees) Regulations, 1993
4 questions. Each answer is explained.
Question 1 of 4Practice · Series III-A — Securities Intermediaries Compliance (Non-Fund)
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Learn these topics
More units in NISM Series III-A
- Introduction to the Financial System8
- Regulatory Framework – General View14
- Introduction to Compliance6
- Securities and Exchange Board of India Act, 199211
- Securities Contracts (Regulation) Act, 1956 and Rules, 19576
- SEBI (Intermediaries) Regulations, 20089
- SEBI (Prohibition of Insider Trading) Regulations, 20159
- SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 20039
- Prevention of Money Laundering Act, 200211
- SEBI (KYC Registration Agency) Regulations, 20113
- SEBI (Foreign Portfolio Investors) Regulations, 20195
- SEBI (Stock Brokers) Regulations, 19929
- SEBI (Merchant Bankers) Regulations 1992, etc.9
- SEBI (Issue of Capital and Disclosure Requirements) Regulations 20189
- Depositories Act 19963
- SEBI (Depositories and Participants) Regulations 20184
- SEBI (Registrar to an Issue and Share Transfer Agents) Regulations, 19934
- SEBI (Research Analyst) Regulations, 20143
- SEBI (Investment Advisers) Regulations, 20133
- SEBI (Credit Rating Agencies) Regulations, 19994
- SEBI (Custodian) Regulations, 19964
- Proxy Advisors3
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 60% · 60 of 100 marks |
| Negative marking | 25% · 0.25 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | Not published by NISM |
NISM Series III-A Securities Intermediaries Compliance (Non-Fund)
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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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.
All 4 questions on SEBI (Debenture Trustees) Regulations, 1993, with answers
Q1Whose interests does a debenture trustee primarily protect in the relevant debenture issue?
Option A. The issuer’s existing equity shareholders
Why it is wrong: The trustee’s primary protective role in this issue is for debenture holders rather than equity holders.
Option B. The merchant banker managing the issue
Why it is wrong: The merchant banker is a separate intermediary and not the class principally represented by the trustee.
Option C. The debenture holders — Correct answer
Option D. The agency rating the debt instrument
Why it is wrong: A rating agency is not the beneficiary class represented by the debenture trustee.
Answer: C. The trustee acts to protect debenture holders in accordance with the issue terms, trust deed and applicable duties. Remember: The trustee’s beneficiary focus is the debenture holders.
Hint, shown before you answer in practice mode: Common mistake: Assuming the issuer’s payment of trustee fees makes the issuer the sole protected party. Think about the beneficiaries of the debenture trust arrangement.
III-A-136easyconceptual
Q2An issuer’s debenture terms require specified security and regular interest payments. What must the trustee monitor?
Option A. Only the issuer’s quoted equity price and trading volume
Why it is wrong: Equity-market performance does not substitute for monitoring the debenture obligations.
Option B. Only the original rating, without considering payment performance
Why it is wrong: An initial rating does not replace ongoing monitoring of the issuer’s actual obligations.
Option C. Only the issue’s subscription level at the original allotment
Why it is wrong: Initial subscription demand does not establish continuing compliance with security and payment terms.
Option D. The security and payment obligations — Correct answer
Answer: D. The trustee should monitor the relevant security and payment obligations rather than relying on unrelated market signals. Remember: Trustee monitoring follows debt terms, security and servicing obligations.
Hint, shown before you answer in practice mode: Common mistake: Using a strong stock price as a substitute for checking debt compliance. Focus on the obligations supporting the debt holders’ contractual protection.
III-A-137mediumapplication
Q3A debenture payment default occurs and the issuer asks the trustee to ignore it. What should guide the trustee’s response?
Option A. Duties under law and the trust deed — Correct answer
Option B. The issuer’s request to wait until the next annual report
Why it is wrong: An issuer’s request cannot override the trustee’s duties concerning default.
Option C. The expected effect of disclosure on the issuer’s borrowing cost
Why it is wrong: A potential funding-cost increase does not remove the trustee’s duties to holders.
Option D. The trustee’s commercial interest in retaining the issuer
Why it is wrong: Commercial interests must not displace the duties owed under the governing framework.
Answer: A. The trustee must follow its legal and trust-deed duties to holders rather than simply accept the issuer’s request. Remember: A trustee must respond to a default through the prescribed protective process.
Hint, shown before you answer in practice mode: Common mistake: Letting the issuer decide whether its own default deserves action. Identify whose rights the trustee is meant to protect during a default.
III-A-138mediumapplication
Q4A hypothetical trust deed requires security worth 1.25 times ₹80 crore outstanding principal. Eligible security is ₹92 crore. What additional security is needed?
Option A. ₹12 crore
Why it is wrong: ₹12 crore measures the excess over principal, not the gap to the required cover.
Option B. ₹20 crore
Why it is wrong: ₹20 crore is the required cushion over principal rather than the remaining shortfall.
Option C. ₹8 crore — Correct answer
Option D. ₹100 crore
Why it is wrong: ₹100 crore is total required security, not the additional amount needed.
Answer: C. Additional security of ₹8 crore is required under the assumed covenant. Required security = 1.25 × ₹80 crore = ₹100 crore. Shortfall = ₹100 crore − ₹92 crore = ₹8 crore. The ratio and principal-only basis are hypothetical contract terms, not a general regulatory formula. Remember: Compare eligible security with the contractual cover requirement, not merely principal.
Hint, shown before you answer in practice mode: Common mistake: Assuming security above principal necessarily satisfies every coverage covenant. First calculate the required security value under the stated contract.
III-A-139hardnumerical
SEBI (Debenture Trustees) Regulations, 1993: common questions
How many practice questions are there on SEBI (Debenture Trustees) Regulations, 1993?
4 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 23 practice topics for NISM Series III-A, which has 150 questions in total.
Are these real NISM Series III-A questions on SEBI (Debenture Trustees) Regulations, 1993?
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.
Does negative marking apply to NISM Series III-A?
Yes. NISM takes off 25% of a question's marks for a wrong answer. On a 1-mark question that is 0.25 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. 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.
SEBI (Credit Rating Agencies) Regulations, 1999
4 questions on SEBI (Credit Rating Agencies) Regulations, 1999. Its quiz opens on that unit.
Open SEBI (Credit Rating Agencies) Regulations, 1999Paper Trading Try it on the practice trading desk