SEBI (Depositories and Participants) Regulations 2018
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 (Registrar to an Issue and Share Transfer Agents) Regulations, 19934
- SEBI (Research Analyst) Regulations, 20143
- SEBI (Investment Advisers) Regulations, 20133
- SEBI (Debenture Trustees) Regulations, 19934
- 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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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 (Depositories and Participants) Regulations 2018, with answers
Q1How frequently must a depository participant reconcile its records with each depository in which it participates?
Option A. Monthly
Why it is wrong: Monthly reconciliation is less frequent than the prescribed requirement.
Option B. Quarterly
Why it is wrong: Quarterly reconciliation confuses this daily control with other periodic reporting.
Option C. Daily — Correct answer
Option D. Annually
Why it is wrong: An annual audit does not replace daily reconciliation.
Answer: C. Regulation 64 requires the participant to reconcile its records with each relevant depository daily. Remember: Routine reconciliation and periodic audits are separate controls.
Hint, shown before you answer in practice mode: Common mistake: Substituting an annual or quarterly audit for daily record matching. Recall the specific reconciliation frequency rather than an audit frequency.
III-A-122easyregulatory
Q2A participant combines different clients’ holdings with its own securities in one undifferentiated account. Which principle is breached?
Option A. A common custody balance with clients distinguished only by risk level
Why it is wrong: Risk categories do not replace separate client records and proper segregation.
Option B. Separate accounts and segregation of securities — Correct answer
Option C. Monthly reconciliation of the combined holding total
Why it is wrong: Reconciling a combined total does not keep each client's securities separate from the participant's own.
Option D. The replacement of client securities with the participant’s promise to pay
Why it is wrong: A participant’s promise is not a substitute for proper custody of the client’s securities.
Answer: B. The arrangement breaches the requirement to maintain separate, segregated beneficial-owner holdings. Remember: Each beneficial owner’s securities must remain distinct from other clients and the participant.
Hint, shown before you answer in practice mode: Common mistake: Assuming a combined total is enough without client-level segregation. Look at whether each client’s holdings remain separately identifiable.
III-A-123mediumapplication
Q3A participant discovers a mismatch between its client ledger and depository records. What should it do first?
Option A. Use the higher balance until the next annual audit
Why it is wrong: Choosing the higher number leaves the source of the discrepancy unresolved.
Option B. Reconcile the difference against valid underlying records — Correct answer
Option C. Create a balancing entry without checking its supporting record
Why it is wrong: An unsupported balancing entry hides rather than resolves the discrepancy.
Option D. Suspend all ledger checks until the client files a complaint
Why it is wrong: Reconciliation duties do not depend on a client first complaining.
Answer: B. The participant should investigate the cause using genuine records and make a supported correction where required. Remember: Reconciliation requires resolving differences, not merely forcing totals to agree.
Hint, shown before you answer in practice mode: Common mistake: Using unexplained balancing entries to make a reconciliation look complete. A reconciliation difference needs evidence before correction.
III-A-124mediumapplication
Q4A person phones a participant claiming to represent a beneficial owner and demands a transfer. There is no verified authority or valid instruction. What should happen?
Option A. Transfer if the caller correctly states the account balance
Why it is wrong: Knowledge of the balance does not prove authority to transfer.
Option B. Transfer if the requested quantity is below the holding balance
Why it is wrong: Having sufficient holdings does not establish valid transfer instructions.
Option C. Transfer using authority previously given by a different client
Why it is wrong: Another client’s authorisation does not authorise this account’s transfer.
Option D. Wait for valid authority and transfer instructions — Correct answer
Answer: D. The participant must establish valid authority and the required instruction before making the transfer. Remember: A securities transfer must have a valid instruction traceable to the authorised account holder.
Hint, shown before you answer in practice mode: Common mistake: Treating familiarity with account details as proof of authority. Knowledge about an account is not the same as authority over it.
III-A-125hardapplication
SEBI (Depositories and Participants) Regulations 2018: common questions
How many practice questions are there on SEBI (Depositories and Participants) Regulations 2018?
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 (Depositories and Participants) Regulations 2018?
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 (Registrar to an Issue and Share Transfer Agents) Regulations, 1993
4 questions on SEBI (Registrar to an Issue and Share Transfer Agents) Regulations, 1993. Its quiz opens on that unit.
Open SEBI (Registrar to an Issue and Share Transfer Agents) Regulations, 1993Paper Trading Try it on the practice trading desk