Special Services – Public Offering / Corporate Actions
12 questions. Each answer is explained.
Question 1 of 10Practice · 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 – Debt Instruments & Government Securities6
- Foreign Portfolio Investors (FPI)4
- Investor Services6
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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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 12 questions on Special Services – Public Offering / Corporate Actions, with answers
Q1An issuer determines a corporate-action entitlement from a record-date beneficial-owner list. Which holding information is relevant under that stated process?
Option A. The eligible holding recorded in that record-date list — Correct answer
Option B. The quantity the investor hopes to buy before payment is made
Why it is wrong: Expected future purchases are not recorded beneficial ownership.
Option C. An unexecuted purchase order entered after the record date
Why it is wrong: A later unexecuted order does not create a record-date holding.
Option D. The largest holding the investor had at any time in the preceding year
Why it is wrong: Historical maximum holdings are not the stated eligibility snapshot.
Answer: A. The record-date process identifies eligible holders and quantities at the prescribed reference point. The later date on which cash is paid or securities are credited is not a general substitute for that eligibility point. Unexecuted orders and hoped-for purchases do not establish recorded entitlement. Remember: Separate the eligibility date from the later delivery or payment date.
Hint, shown before you answer in practice mode: Common mistake: Assuming eligibility is always based on holdings when the benefit arrives.
VI-123mediumapplication
Q2An investor is entitled to dividend on 320 shares. The declared dividend is ₹7.50 per share. Ignoring withholding and other deductions, what cash amount is due?
Option A. ₹2,400 — Correct answer
Option B. ₹2,560
Why it is wrong: ₹2,560 would use ₹8 rather than the declared ₹7.50 per share.
Option C. ₹42.67
Why it is wrong: Dividing shares by the dividend rate does not calculate cash due.
Option D. ₹320
Why it is wrong: ₹320 is the share quantity, not the monetary entitlement.
Answer: A. Gross dividend equals the eligible quantity multiplied by the declared amount per share: 320 × ₹7.50 = ₹2,400. The per-share declaration should not be confused with a percentage of the current market price. The calculation assumes eligibility is already established and excludes deductions expressly. Remember: Use eligible shares times the declared per-share benefit.
Hint, shown before you answer in practice mode: Common mistake: Applying a per-share cash dividend as a percentage of market value.
VI-124mediumnumerical
Q3A company announces three bonus shares for every five eligible shares held. A BO has 400 eligible shares and no fractional entitlement arises. How many bonus shares are credited?
Option A. 666 shares
Why it is wrong: This reverses the ratio and does not match the stated issue.
Option B. 240 shares — Correct answer
Option C. 400 shares
Why it is wrong: 400 is the old eligible holding.
Option D. 640 shares
Why it is wrong: 640 is the post-bonus total rather than the additional shares.
Answer: B. Bonus shares are 400 × 3/5 = 240. After the credit, the total holding would be 640, but the question asks only for the new bonus quantity. A bonus issue is not a cash dividend, and the arithmetic alone does not mean the total market value rises proportionately. Remember: Distinguish the incremental corporate-action credit from the final total balance.
Hint, shown before you answer in practice mode: Common mistake: Answering with the total holding when the question asks for bonus shares.
VI-125mediumnumerical
Q4A company splits each ₹10 face-value share into five ₹2 face-value shares. A BO holds 180 old shares. What quantity should result after the split, ignoring any unrelated transaction?
Option A. 180 shares
Why it is wrong: 180 ignores the five-for-one conversion.
Option B. 36 shares
Why it is wrong: 36 reverses the split ratio as though the shares were consolidated.
Option C. 1,800 shares
Why it is wrong: 1,800 is the aggregate face value in rupees, not the number of new shares.
Option D. 900 shares — Correct answer
Answer: D. Each old share becomes five new shares, so 180 × 5 = 900. The aggregate face value is preserved: 180 × ₹10 = 900 × ₹2 = ₹1,800. More shares do not by themselves represent additional economic wealth. The denomination has changed. Remember: For a split, reconcile both quantity and aggregate face value.
Hint, shown before you answer in practice mode: Common mistake: Confusing rupee face value with the count of shares.
VI-126mediumnumerical
Q5A rights issue offers one new share for every four eligible shares at ₹80 per new share. An investor holds 600 eligible shares and subscribes fully to this entitlement. What subscription amount is required?
Option A. ₹150
Why it is wrong: 150 is the new share quantity, not the amount payable.
Option B. ₹8,000
Why it is wrong: ₹8,000 does not correspond to the stated entitlement and price.
Option C. ₹12,000 — Correct answer
Option D. ₹48,000
Why it is wrong: ₹48,000 applies the issue price to all 600 existing shares.
Answer: C. The entitlement is 600 ÷ 4 = 150 new shares. Full subscription at ₹80 each requires 150 × ₹80 = ₹12,000. A rights entitlement is an opportunity to subscribe under the terms. It should not be treated as a free bonus credit. Remember: Calculate rights quantity first, then multiply by the subscription price.
Hint, shown before you answer in practice mode: Common mistake: Treating rights shares as free or charging the issue price on the old holding.
VI-127hardnumerical
Q6Under an approved merger scheme, holders receive two shares of Company Y for every five shares of Company X. A BO has 750 eligible X shares. How many Y shares are allotted under that ratio?
Option A. 300 shares — Correct answer
Option B. 1,875 shares
Why it is wrong: 1,875 reverses the ratio.
Option C. 750 shares
Why it is wrong: 750 assumes a one-for-one exchange that the scheme does not provide.
Option D. 1,050 shares
Why it is wrong: 1,050 adds the old quantity and new entitlement rather than answering the Y allotment.
Answer: A. The consideration quantity is 750 × 2/5 = 300 Y shares. The issuer/RTA and depository implement the approved scheme’s record and credit instructions. The old X holding and the new Y entitlement should not be added as though both necessarily remain outstanding after the merger. Remember: Apply the scheme’s exchange ratio to the eligible old-security quantity.
Hint, shown before you answer in practice mode: Common mistake: Carrying the old quantity unchanged into the new ISIN despite a non-unit ratio.
VI-128hardnumerical
Q7Which statement correctly distinguishes an ordinary bonus credit from a rights subscription?
Option A. Rights shares are always credited free, while bonus shares need the investor to pay in cash
Why it is wrong: This reverses the usual distinction.
Option B. Bonus shares are credited by entitlement. Rights shares usually need subscription and payment — Correct answer
Option C. Both always require the investor to pay the same issue price before shares are credited
Why it is wrong: A bonus issue does not normally require the shareholder to pay an issue price.
Option D. Neither needs any eligibility check or record-date information before the shares are credited
Why it is wrong: Both actions still use the relevant eligibility and issuer instructions.
Answer: B. A bonus issue capitalises reserves through an additional share allocation under the declared entitlement. A rights issue offers an opportunity to acquire new shares on specified terms, normally requiring exercise and payment. The two may both result in demat credits, but their preconditions and cash consequences differ. Remember: A similar final demat credit can arise from very different investor actions and cash flows.
Hint, shown before you answer in practice mode: Common mistake: Assuming all corporate-action share credits are automatic and free.
VI-129mediumconceptual
Q8Before any invocation, an ordinary pledge remains recorded on a shareholder’s demat holding. To whom are the corporate benefits ordinarily associated under the depository pledge treatment, subject to applicable arrangements?
Option A. The DP automatically as fee income
Why it is wrong: The DP does not receive corporate benefits as its own servicing income.
Option B. The pledgor as beneficial holder — Correct answer
Option C. The exchange regardless of record-date ownership
Why it is wrong: An exchange is not the beneficial recipient merely because a security is listed.
Option D. The pledgee automatically as if it had already invoked
Why it is wrong: Invocation has expressly not occurred, so its ownership consequences should not be assumed.
Answer: B. Pledge creation records an encumbrance while the holding remains with the pledgor. Under the ordinary depository treatment, corporate benefits remain associated with that beneficial holding before invocation. Additional security or treatment of a particular non-cash benefit can depend on the agreement and relevant process, so one should not infer that a pledge is already an outright ownership transfer. Remember: Check ownership status and corporate-action treatment separately from the existence of a pledge.
Hint, shown before you answer in practice mode: Common mistake: Awarding every benefit to the lender merely because collateral has been accepted.
VI-130hardapplication
Q9An IPO applicant enters another person’s BO ID while using the applicant’s own identity particulars. Why is this a material error?
Option A. The broker may pick a different account after allotment, without any validation
Why it is wrong: A destination change must follow prescribed checks, not arbitrary broker selection.
Option B. Allotment validation needs the applicant’s identity and demat account to match — Correct answer
Option C. Only the payment amount matters once the IPO application has been fully submitted
Why it is wrong: Accurate funds do not remedy a mismatched applicant and demat destination.
Option D. Any valid demat account can be used, even if its holder is unrelated
Why it is wrong: A technically valid account is not necessarily a valid destination for this applicant.
Answer: B. Demat allotment requires accurate and consistent applicant and destination-account details. A mismatched BO ID can prevent validation or credit even where the applicant otherwise paid or blocked funds. The process does not permit arbitrary correction to an unrelated account without the prescribed checks. Remember: Verify investor identity and demat destination together before submitting an application.
Hint, shown before you answer in practice mode: Common mistake: Assuming a valid PAN alone makes all application details correct.
VI-131mediumapplication
Q10A public-issue application requests 300 shares, but the confirmed allotment is only 120 shares. No other credit applies. What quantity should be reconciled as the demat allotment credit?
Option A. 180 shares
Why it is wrong: 180 is the difference not allotted.
Option B. 420 shares
Why it is wrong: 420 adds the request and allotment as though they were separate entitlements.
Option C. 300 shares
Why it is wrong: 300 is the requested quantity, not the confirmed allotment.
Option D. 120 shares — Correct answer
Answer: D. The allotment confirmation, not the original demand, determines the shares due for credit. Here the BO should reconcile 120. The unallotted balance of 180 relates to the application’s unfulfilled quantity and any associated money-release process. It is not a second demat entitlement. Remember: Reconcile corporate-action credits to confirmed entitlement rather than the amount requested.
Hint, shown before you answer in practice mode: Common mistake: Treating subscription demand as proof of allotment.
VI-132mediumnumerical
Q11An investor has an allotment confirmation but no corresponding demat credit. Which set of details is most useful for investigating the missing allotment with the RTA/DP?
Option A. A new nomination form for the account, without any of the allotment information
Why it is wrong: Nomination details do not trace the specific allotment instruction.
Option B. Only a broker’s advertising message about the IPO, unrelated to this application
Why it is wrong: An advertisement is not evidence of entitlement or destination.
Option C. Only the share price the investor hoped to get, with no application details
Why it is wrong: Desired market price does not identify the missing allotment.
Option D. The application or allotment reference, security details and validated demat IDs — Correct answer
Answer: D. The investigation must connect the allotment record to the intended security and account. Application and allotment references help the RTA trace the issuer-side instruction, while demat identifiers help verify the destination and credit status. Reapplying for a different account event would not resolve that reconciliation. Remember: An exception investigation needs identifiers from both sides of the process.
Hint, shown before you answer in practice mode: Common mistake: Raising an untraceable complaint without application or account references.
VI-133mediumapplication
Q12A completed capital reorganisation has replaced the old security with a new ISIN. A client submits a debit using the inactive old ISIN. What should the DP check before processing?
Option A. Only whether the old company name looks like the new name on the statement
Why it is wrong: A similar name does not establish the exact active issue and balance.
Option B. The corporate-action record and the security and quantity credited under the new ISIN — Correct answer
Option C. Whether the client will agree to a debit from some other holding in the account instead
Why it is wrong: A different asset cannot be debited merely to force execution of an invalid instruction.
Option D. Whether the old market price was higher than the new one after the reorganisation
Why it is wrong: Historical market prices do not identify the current deliverable security.
Answer: B. Corporate actions can change the security identifier and quantity available in an account. A debit must refer to the active, available holding actually resulting from the action. Staff must reconcile the issuer’s conversion terms and depository entries rather than reuse an obsolete identifier or substitute an unrelated asset. Remember: After a corporate action, verify the new security master and transformed balance.
Hint, shown before you answer in practice mode: Common mistake: Continuing to use an old ISIN after the underlying holding has been replaced.
VI-134hardapplication
Special Services – Public Offering / Corporate Actions: common questions
How many practice questions are there on Special Services – Public Offering / Corporate Actions?
12 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 Special Services – Public Offering / Corporate Actions?
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.
Special Services – Debt Instruments & Government Securities
6 questions on Special Services – Debt Instruments & Government Securities. Its quiz opens on that unit.
Open Special Services – Debt Instruments & Government Securities