Series VII
Securities Operations and Risk Management
50 questionsPass mark 50%Negative marking 25% / wrong answer
NISM Series VII practice questions
150 questions. Each answer is explained.
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Learn these topics
Practise one unit at a time
- Introduction to the Securities Market16 questions
- Market Participants in the Securities Market15 questions
- Introduction to Securities Broking Operations23 questions
- Risk Management29 questions
- Clearing Process17 questions
- Settlement Process21 questions
- Investor Grievances and Arbitration15 questions
- Other Services Provided by Brokers14 questions
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 50% · 50 of 100 marks |
| Negative marking | 25% · 0.25 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
NISM Series VII Securities Operations and Risk Management
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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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.
5 sample questions with answers
The other 145 are on the unit pages above, written out the same way.
Q1A Treasury bill is bought for ₹98 per ₹100 face value and redeemed for ₹100 after 182 days. Using simple annualisation on a 365-day year, what is the annualised return on the amount invested, rounded to two decimals?
Option A. 2.04%
Why it is wrong: This is the 182-day holding-period return, without annualisation.
Option B. 4.01%
Why it is wrong: It annualises the discount relative to face value rather than the amount invested.
Option C. 2.00%
Why it is wrong: It divides the gain by face value and does not annualise.
Option D. 4.09% — Correct answer
Answer: D. This answer annualises the ₹2 gain relative to the ₹98 investment. Gain per ₹100 face value = ₹100 − ₹98 = ₹2. Holding-period return = ₹2 ÷ ₹98 = 0.02040816. Simple annualised return = (₹2 ÷ ₹98) × (365 ÷ 182) × 100 = 4.0928459%. Rounded answer = 4.09% per year. This is not a compounded annual return. Remember: Use the invested amount, then apply the stated day-count and annualisation method.
Hint, shown before you answer in practice mode: Common mistake: Confusing an investment-yield calculation with a face-value discount rate.
VII-076mediumnumerical
Q2Two investors’ demat statements show the same ISIN for an equity holding. What does this matching identifier establish?
Option A. They use the same trading account
Why it is wrong: An ISIN is not a trading-account identifier.
Option B. They hold the same identified security — Correct answer
Option C. They have the same beneficial-owner number
Why it is wrong: A beneficial-owner account is not identified by the security’s ISIN.
Option D. They bought through the same broker
Why it is wrong: Security identity does not identify the broker used to acquire it.
Answer: B. The matching code identifies the same security in both statements. The identifier is assigned to the security. Different investors may hold that security. A matching ISIN therefore does not establish matching account numbers or a common broker. Remember: Match the ISIN to the instrument, not to the holder.
Hint, shown before you answer in practice mode: Common mistake: Treating a security code as a client-account code.
VII-054easyapplication
Q3A clearing corporation starts with a failure condition: available margins, Core SGF and other resources are insufficient. It then searches for market scenarios that could cause that condition. Which exercise is this?
Option A. Reverse stress testing — Correct answer
Option B. Routine margin backtesting
Why it is wrong: Backtesting compares past estimates with realised outcomes.
Option C. Daily mark-to-market calculation
Why it is wrong: Mark-to-market values positions. It does not search for failure scenarios.
Option D. Forward testing of a fixed price shock
Why it is wrong: Forward stress testing starts with a selected shock and evaluates its result.
Answer: A. This answer searches for the conditions under which resources would be insufficient. The starting point is insufficiency of resources, not a chosen market shock. The exercise identifies combinations of market conditions that would produce that failure. Remember: Reverse stress testing asks what would make the resources fail.
Hint, shown before you answer in practice mode: Common mistake: Confusing a search for failure conditions with testing one already chosen shock.
VII-062mediumapplication
Q4A trading member assigns an executed cash-market trade to a custodian. The custodian rejects it under NSE Clearing’s process. Where is the settlement obligation assigned?
Option A. Back to the trading member — Correct answer
Option B. To the custodian despite the rejection
Why it is wrong: This treats rejection as confirmation.
Option C. To the securities issuer
Why it is wrong: The issuer does not take over settlement of this secondary-market trade.
Option D. To neither party because the trade is cancelled
Why it is wrong: The rejection does not by itself annul the executed trade.
Answer: A. Custodial rejection returns the obligation to the trading member rather than cancelling the exchange trade. The trade has already been executed. The question concerns who will settle it. NSE Clearing assigns a rejected custodial trade back to the trading member for settlement obligations. Remember: A rejected custodial assignment does not make the executed trade disappear.
Hint, shown before you answer in practice mode: Common mistake: Confusing a rejected clearing assignment with cancellation of execution.
VII-086mediumapplication
Q5In an investor dispute, a neutral person helps both parties work towards mutually acceptable terms rather than deciding the claim through an award. Which process is described?
Option A. Arbitration
Why it is wrong: An arbitrator decides the dispute through an award rather than merely facilitating mutual terms.
Option B. Award enforcement
Why it is wrong: Enforcement presupposes an award and is not the negotiation assistance described.
Option C. Appellate review
Why it is wrong: A review of an earlier decision is not the process in the stem.
Option D. Conciliation — Correct answer
Answer: D. The neutral assists an agreed settlement rather than adjudicating through an award. The neutral’s role is to assist agreement between the parties. That describes conciliation. Arbitration instead involves determination through an award, subject to the applicable legal framework. Remember: Conciliation seeks mutual agreement. Arbitration produces a decision through an award.
Hint, shown before you answer in practice mode: Common mistake: Assuming every neutral involved in a dispute is acting as an arbitrator.
VII-091mediumapplication
NISM Series VII practice: common questions
Are these the real NISM Series VII exam questions?
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.
How many practice questions are there for NISM Series VII?
150 at the moment, across 8 practice topics, with one page per unit. It is a practice set, not a copy of the paper: the real NISM-Series-VII: Securities Operations and Risk Management Certification Examination has 100 questions.
Where are all the questions and answers?
On the 8 practice topics listed above. There are 5 in full. Each unit's page has the rest, with all four options, the correct answer and why each other option is wrong.
Does negative marking apply to NISM Series VII?
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.
How do I book the NISM Series VII exam?
You register and pay on NISM's own website, nism.ac.in. The steps and the fee change from time to time, so read them there on the day you book.
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.
See the exam these questions follow
The Securities Operations and Risk Management exam page shows the question count, the time, the pass mark and the marking rule.
Open the NISM Series VII exam page