NISM VII — Securities Operations & Risk Management
Complete NISM-VII prep — securities products, intermediaries, client onboarding & KYC, order management, contract notes, broker risk framework, margining, clearing & settlement (T+1), auctions, investor grievances, IPF, arbitration, SAT, margin trading, IPOs. Aligned to the June 2025 workbook.
Securities Market — Primary vs Secondary
A securities market is the marketplace where financial securities — shares, bonds, debentures, mutual-fund units, derivatives — are issued and traded....
Securities Products — Equity, Debt, Derivatives, MFs
Securities products span four broad buckets: EQUITY (shares that represent ownership), DEBT (bonds and debentures that represent a loan), DERIVATIVES ...
Market Intermediaries — Brokers, Sub-Brokers, APs
A stock broker is a SEBI-registered intermediary that acts as an agent between investors and the stock exchange — executing buy/sell orders, managing ...
Regulators and Investor Classes
Indian securities markets are regulated primarily by SEBI, with RBI covering currency/debt, IRDAI (insurance), PFRDA (pension) and IFSCA (at GIFT City...
Depositories, DPs and Registrars
A Depository holds securities in electronic (dematerialised) form — India has two: NSDL (1996) and CDSL (1999). Depository Participants (DPs) are the ...
Client Onboarding — KYC, CKYC and PMLA
Before executing any trade, a broker must complete Know Your Customer (KYC) under the PMLA Rules 2005 and SEBI master circular. Central KYC (CKYC) mai...
Order Types and Trade Management
An exchange order has six mandatory fields — security, buy/sell, quantity, price, time condition, client UCC. Orders are classified on three axes: pri...
Contract Note, Brokerage and Charges
A Contract Note is the legal record of every trade — it must be issued within 24 hours of execution and establishes a legally enforceable relationship...
Books, Records and Margin Reporting
Under SEBI (Stock Brokers) Regulations 1992 and SCRR 1957, brokers must maintain ~15 statutory books and registers — ranging from client ledger, Regis...
Broker Risk Framework — Operational, Market, Credit
A stock broker faces four main risk categories — Operational (process, people, systems), Market (client positions hit by price moves), Credit (client ...
Margining Systems — VaR, SPAN, Exposure
India uses VaR (Value at Risk) margining for cash-segment trades and SPAN (Standard Portfolio Analysis of Risk) for F&O. Both aim to cover adverse pri...
Margin Collection, Client Funding and Reporting
SEBI mandates upfront margin collection — the broker must collect full applicable margin before taking client orders. Client funds must be in a design...
Clearing Process — Novation and Netting
Clearing is the process of computing each party's net obligations post-trade. Novation replaces the original bilateral trade with the Clearing Corpora...
Pool Accounts, Pay-in and Interoperability
Pool Accounts are special depository accounts used by Clearing Members to receive net securities from selling clients (Pay-In) and deliver to buying c...
Settlement Cycle — T+1, Pay-In, Pay-Out
India moved from T+2 to T+1 rolling settlement in Jan 2023 (phased), and is testing T+0 same-day since Mar 2024. In T+1: Trade on Day T → Pay-In (cash...
Auctions, Short Delivery and Corporate Actions
When a seller fails to deliver on T+1, the Clearing Corp runs an auction on T+1 afternoon to source the shortfall from the market. Buying clients get ...
Grievance Redressal — Broker, Exchange, SCORES, IPF
SEBI mandates a layered grievance-redressal framework — (1) investor complains to broker first, (2) escalates to exchange Investor Grievance Cell, (3)...
Arbitration, SAT and Legal Remedies
Arbitration is a mandatory alternative-dispute-resolution mechanism between a broker and client — faster and cheaper than courts. Exchanges maintain a...
Margin Trading Facility, PMS and Research Services
Brokers offer several value-added services beyond plain execution: Margin Trading Facility (MTF) — leverage for delivery trades; Portfolio Management ...
IPO Applications, ASBA and Mutual Fund Distribution
Brokers distribute IPOs via ASBA (Application Supported by Blocked Amount) and UPI; distribute mutual funds as AMFI-registered distributors (ARN-regis...
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