Investor Services
6 questions. Each answer is explained.
Question 1 of 6Practice · Series VI — Depository Operations
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Learn these topics
More units in NISM Series VI
- Introduction to the Indian Capital Market8
- Introduction to Depository12
- Depository and its Business Partners10
- Functions of Depository Participant – Account Opening18
- Functions of Depository Participant – Account Operations14
- Functions of Depository Participant – Transmission and Nomination14
- Functions of Depository Participant – Dematerialisation18
- Functions of Depository Participant – Trading and Settlement16
- Special Services – Pledge & Hypothecation12
- Special Services – Public Offering / Corporate Actions12
- Special Services – Debt Instruments & Government Securities6
- Foreign Portfolio Investors (FPI)4
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 VI Depository Operations
Exam rules read on NISM's site on 3 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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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 3 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 6 questions on Investor Services, with answers
Q1A BO notices an unexplained DP charge and wants it investigated. Which first step best supports a documented grievance process?
Option A. Raise it through the DP’s designated complaint channel and keep the reference — Correct answer
Option B. Ask an unrelated issuer to reverse the DP’s tariff entry on the account
Why it is wrong: An unrelated issuer does not administer the DP’s charges.
Option C. Share the account password with a stranger who says they know someone at the regulator
Why it is wrong: Sharing credentials is unsafe and unnecessary for a legitimate complaint.
Option D. Post only an anonymous comment about market prices online, with no account details
Why it is wrong: An untraceable comment does not identify the service failure for investigation.
Answer: A. The concerned intermediary should be given the specific complaint through its recognised channel, creating a record of the issue and response. Supporting statements and the complaint reference help if escalation becomes necessary. A public comment or disclosure of credentials is not a substitute for a traceable grievance. Remember: Start a complaint with the responsible entity and preserve an audit trail.
Hint, shown before you answer in practice mode: Common mistake: Skipping the basic complaint record and then being unable to show what was raised.
VI-145mediumapplication
Q2What is the principal purpose of SEBI’s SCORES platform?
Option A. To approve every demat transfer before the depository is allowed to carry it out
Why it is wrong: Routine depository instructions are not all approved through SCORES.
Option B. To issue binding compensation automatically for every complaint filed
Why it is wrong: A complaint requires examination. Filing does not itself guarantee compensation or an adjudication.
Option C. To conduct the matching of securities trades between investors
Why it is wrong: Trade matching is not the complaint platform’s purpose.
Option D. To help investors file securities-market complaints and get them handled — Correct answer
Answer: D. SCORES is SEBI’s investor complaint-redressal platform. It supports lodging and tracking eligible complaints and the associated response/review process. It is not an order-entry system, a personal security identifier service or an insurance contract against investment losses. Remember: Use a grievance platform for a grievance, not for trading or return guarantees.
Hint, shown before you answer in practice mode: Common mistake: Confusing the ability to complain with an automatic right to compensation.
VI-146easyregulatory
Q3A DP replies that a disputed debit was authorised, but the BO disagrees. What information most directly supports a meaningful escalation or review?
Option A. The transaction reference, statements, original complaint and the DP’s reply — Correct answer
Option B. The login passwords and PINs for every demat and bank account the investor holds
Why it is wrong: Credentials should remain protected. They are not required to establish a documented complaint.
Option C. Only a statement that the share price rose sharply in the weeks after the debit
Why it is wrong: A price move alone does not show authority for the transaction.
Option D. A new trading strategy for the account, unrelated to the debit itself
Why it is wrong: An unrelated strategy does not clarify the contested service event.
Answer: A. Review needs a traceable record of the disputed event, the complaint and the intermediary’s explanation. These materials help identify what happened and what remains unresolved. Subsequent price movement may affect a claimed consequence but does not itself establish whether the debit was authorised. Passwords are not appropriate evidence to disclose. Remember: Escalation should identify the unresolved issue and its evidence, not merely repeat dissatisfaction.
Hint, shown before you answer in practice mode: Common mistake: Submitting a complaint without the reference or earlier response needed to investigate it.
VI-147hardapplication
Q4Which institution is associated with administering the statutory process for refund of eligible unclaimed dividends and shares transferred to IEPF?
Option A. The Investor Education and Protection Fund Authority — Correct answer
Option B. The company’s ordinary dividend-paying bank acting alone
Why it is wrong: A bank payment function does not replace the statutory IEPFA refund process.
Option C. An exchange’s Investor Protection Fund for broker defaults
Why it is wrong: The exchange default-compensation fund is a different investor-protection mechanism.
Option D. The DP’s demat account-opening department
Why it is wrong: Opening a demat account does not itself administer assets already transferred to IEPF.
Answer: A. IEPFA administers the statutory fund and the relevant refund process for eligible unclaimed assets, including dividends and shares. Its function should not be confused with exchange trade execution or a bank’s routine account access. A claimant must follow the prescribed entitlement and verification procedure. Remember: Direct a claim to the authority responsible for the particular unclaimed-asset framework.
Hint, shown before you answer in practice mode: Common mistake: Treating all investor-protection mechanisms as the same fund or portal.
VI-148mediumconceptual
Q5An investor learns that shares and unclaimed dividends have already been transferred to IEPF. Which conclusion is correct?
Option A. The issuer must double the holding as compensation, without any verification
Why it is wrong: No automatic doubling or waiver of verification follows from transfer to the fund.
Option B. An entitled claimant can seek a refund through the prescribed IEPFA process — Correct answer
Option C. The DP may replace the shares by debiting another client’s account
Why it is wrong: Another client’s securities cannot satisfy this claim.
Option D. Transfer to IEPF necessarily means every claim is permanently extinguished
Why it is wrong: The existence of a statutory refund function contradicts automatic permanent forfeiture.
Answer: B. The official IEPFA description expressly includes refund of shares and unclaimed dividends to eligible claimants. Transfer into the statutory framework does not mean the investor should assume that no recovery route exists. The claimant must establish entitlement and comply with the current procedure. Recovery is not achieved by substituting someone else’s assets. Remember: Check the prescribed refund route before concluding that an unclaimed asset is lost forever.
Hint, shown before you answer in practice mode: Common mistake: Confusing transfer to IEPF with cancellation of all rights to make an eligible claim.
VI-149mediumapplication
Q6A holder’s shares are correctly recorded in demat, but dividend credits repeatedly fail because the registered bank account is closed. What servicing action addresses the immediate cause?
Option A. Dematerialise the same shares a second time to create another holding in the demat account
Why it is wrong: The securities are already in demat. A second conversion would not repair the cash mandate.
Option B. Update the bank details with the DP and trace the unpaid dividends with the issuer/RTA — Correct answer
Option C. Ask for the ISIN to be cancelled and set up a new trading password for the account
Why it is wrong: An ISIN identifies the security, and a password change does not update the dividend bank details.
Option D. Assume that a correct shareholding automatically means every dividend has already been paid
Why it is wrong: A correct share balance proves neither successful cash payment nor current bank data.
Answer: B. Securities ownership records and cash-payment instructions are linked but distinct. A valid holding can still have unpaid benefits when bank details are obsolete. The investor should correct the payment details through authenticated procedures and establish the unpaid amount and claim route with the responsible issuer/RTA. Any already transferred IEPF claim follows its own statutory process. Remember: Reconcile cash benefits as well as securities balances and keep payment details current.
Hint, shown before you answer in practice mode: Common mistake: Checking demat quantity but never checking whether issuer cash benefits actually arrived.
VI-150hardapplication
Investor Services: common questions
How many practice questions are there on Investor Services?
6 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 13 practice topics for NISM Series VI, which has 150 questions in total.
Are these real NISM Series VI questions on Investor Services?
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 VI?
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.
Try a paper on all of NISM Series VI
This is the last unit of Depository Operations. The series page runs one quiz across every unit.
Open the NISM Series VI practice page