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SEBI (Investment Advisers) Regulations, 2013

3 questions. Each answer is explained.

Question 1 of 3Practice · Series III-A — Securities Intermediaries Compliance (Non-Fund)

0 right · 0 wrong · 3 to go

Series III-A19. SEBI (Investment Advisers) Regulations, 2013AdvancedApplied caseQuestion reference III-A-135

Question 1 of 3A client says they enjoy high risk but cannot absorb a material loss and need the money soon. Which approach best meets suitability requirements?

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More units in NISM Series III-A

Practise all of NISM Series III-A

Exam format

Questions100 · 1 mark each
Duration120 min · 2 hours
Pass mark60% · 60 of 100 marks
Negative marking25% · 0.25 marks off per wrong answer
Certificate validity3 years · from the date of the examination
Marks for this unitNot 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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.

Rules used across this bank
  • 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.
Extra rules for Series VII
  • 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.
Extra rules for Series I
  • 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 3 questions on SEBI (Investment Advisers) Regulations, 2013, with answers

  1. Q1In what capacity must a registered investment adviser act towards its clients under the general responsibility provisions?

    • Option A. An execution-only agent without any advisory duty

      Why it is wrong: The adviser has fiduciary duties and is not merely an execution-only agent.

    • Option B. A representative primarily advancing an issuer’s fundraising interests

      Why it is wrong: The adviser’s client duty is not replaced by an issuer’s fundraising objective.

    • Option C. A fiduciary capacity — Correct answer

    • Option D. A counterparty primarily pursuing profit against the client

      Why it is wrong: The adviser must act in a fiduciary capacity rather than treat the client as an opposing counterparty.

    Answer: C. An investment adviser must act in a fiduciary capacity, placing the client relationship under duties of trust and proper conduct. Remember: An investment adviser’s role carries a fiduciary responsibility to the client.

    Hint, shown before you answer in practice mode: Common mistake: Treating advice as ordinary product selling without client-centred duties. Recall the duty arising from a relationship of trust with the client.

    III-A-133easyregulatory

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  2. Q2A client loses stable income and now needs invested money within six months. What should the adviser do before giving further advice?

    • Option A. Continue using the original profile without review

      Why it is wrong: An outdated profile can lead to unsuitable advice.

    • Option B. Update the client’s risk profile and reassess suitability — Correct answer

    • Option C. Increase risk automatically to replace lost income

      Why it is wrong: A need for income does not automatically justify taking greater risk.

    • Option D. Ignore the change unless the client signs a complaint

      Why it is wrong: Material changes matter before any complaint is filed.

    Answer: B. The adviser should update the risk assessment and reassess whether further advice is suitable for the changed circumstances. Remember: Risk profiling and suitability are continuing duties rather than one-time forms.

    Hint, shown before you answer in practice mode: Common mistake: Relying on an old profile after the client’s financial circumstances change. Identify whether the client’s capacity, needs or time horizon have changed.

    III-A-134mediumapplication

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  3. Q3A client says they enjoy high risk but cannot absorb a material loss and need the money soon. Which approach best meets suitability requirements?

    • Option A. Consider financial capacity and time horizon, not willingness alone — Correct answer

    • Option B. Treat enthusiasm for risk as the only relevant factor

      Why it is wrong: Willingness alone does not establish the ability to absorb losses.

    • Option C. Ignore the short horizon if a disclaimer is signed

      Why it is wrong: A disclaimer does not remove the duty to assess the short time horizon.

    • Option D. Assume a complex product is suitable because it is available

      Why it is wrong: Product availability does not establish suitability for this client.

    Answer: A. The adviser must consider capacity, needs and horizon alongside willingness when assessing suitability. Remember: Risk appetite and loss-bearing capacity are different inputs to suitability.

    Hint, shown before you answer in practice mode: Common mistake: Equating enthusiasm for high returns with financial ability to take high risk. Separate willingness to take risk from the ability to bear it.

    III-A-135hardapplication

    Study this unit

SEBI (Investment Advisers) Regulations, 2013: common questions

How many practice questions are there on SEBI (Investment Advisers) Regulations, 2013?

3 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 (Investment Advisers) Regulations, 2013?

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.

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