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Capital market

Note: NCFM is the Trademark, Registered by NSE

LOG ON SCREEN

On starting NEAT (National Exchange for Automatic Trading) Application, the log on (Pass Word) Screen Appears with the Following Details. 1) User ID 2) Trading Member ID 3) Password NEAT CM (Default Password) 4) New Pass word.

Note:-1) User ID is a Unique

2) Trading Member ID is Unique & Function, it is Common for All user of the Trading Member.

3) New Password- Minimum 6 characteristics, Maximum 8 characteristics only 3 attempts are accepted by the user to enter the password to open the Screen

4) If password is Forgotten the User required to In form the Exchange in writing to reset the Password.

TRADING SYSTEM

Nation wide online Fully Automated Screen Based Trading System (SBTS) 1. Price priority. 2. Time Priority.

Note:-1) NEAT system provides open electronic consolidated limit order book (OECLOB)

2) Limit order means : Stated quantity and stated price

Before Opening the Market User allowed to Set up 1) Market Watch Screen 2) Inquiry Screens Only

Open Phase (Open Period)

Use Allowed to 1) Enquiry 2) Order Entry 3) Order Modification 4) Order Cancellation 5) Order Matching 6) to Set up Market Watch Screen Market Closing Period

User Allowed only for inquiries

Surcon period (Surveillance & Control period)

The System process the Data, for making the system, for the Next Trading day.

Log of the Screen (Before Surcon Period) The Screen Shows:1) Permanent sign off 2) Temporary sign off 3) Exit Not Allowed Inquiry & Order Placing

Permanent Sign Off- internal data of the market not update.

Temporary Sign Off- Internal data of the market up Date (Temporary Sign off, after 5 Minutes Automatically Activate)

Exit: - The User Come Out Sign off Screen.

Local Database Local Database is used for All inquiries made by the user for Own Orders / Trades information. It is used for corporate manager / Branch Manager Makes Inquiries for orders / trades of any branch manager / Dealer of the trading firm, Then the inquiry is Serviced By the host, The Local database also includes message of security information.

Ticker Window The ticker window displays information of All Trades in the system.

The user has the option of Selecting the Security, That should be appearing in the ticker window.

Securities in ticker can be selected for each market types

The ticker window displays both derivative and capital market segment

Market watch Window Title Bar : Title Bar Shows: NEAT , Date & Time.

Market Watch Window facilitate to set only 500 Scrips, But the User Set up a Maximum of 30 Securities in one Page.

Type of Orders on time basis and price basis

Time related order :- Day Order, G.T.C, G.T.D, I.O.C.

Price related order:- Buy / Sell limit and STOP Loss Order

Previous Trade Screen

Previous Trade Screen Shows & Allows Security Wise Information to user for his own Trade, in Chronological Order. A) Request for Trade Modification Allowed with the Following conditions 1) 2) 3) 4) During the Day Only Must be Lower then the Traded Quantity Both Parties acceptance (Buyer and Seller) Final Decision is taken by NSE ( to accept or reject )

B) Request for Trade Cancellation Allowed with same as Above Conditions (A). Out Standing Order Screen

Out Standing Order Screen show, Status out Standing Orders enter by User for a Particular Security (R.L. Orders & SL Orders) it Allows:- Orders Modification & Orders Cancellation.

Activity Log Screen Activity logon Screen Show, All Activities performed on Any Order by the User, in Reversal chronological Order B S :- Buying :- Selling Orders

OC :- Cancellation of Order OM :- Modification of Order TC :- Buy Order & Sell Orders. Involving in Trade are cancelled. TM :- Buy Order & Sell Orders, Involving Trade are Modified. It is very useful to a corporate Manager to view all the activities that have been performed on any order (or) All ordered under his Branches & Dealers Order Status Screen Order Status Screen Shows, Current status of Dealers own Specified Orders. SNAP Quote Shows Instantaneous Information About a particular Security can be shown on Market Watch Window (which is not set up in Market Watch Window) Market Movement Option Over all Movement of the Security, In Current Day, on time Basis.

Market Inquiry Market Inquiry Screen Shows Market Statistics for Particular Market, for a particular Security . It shows Information About:RL Market RD Market OL Market (Regular lot Market) ( Retail Debt Market) (odd lot Market)

It shows Following Statistics:- Open Price, High Price, Low Price ,Last Traded Price, Traded Quantity ,52 Weeks High/Low Price. MBP (Market By Price) MBP Screen shows Total Out standing Orders of a particular security, in the Market, Aggregate at each price in order of Best 5 prices. It Shows:- RL Orders (Regular Lot Orders ) SL Orders (Stop Loss Order) ST Orders (Special Term Orders). Buy Back Orders with * Symbol

P - Indicate Pre Open Position S Indicate Security Suspend Security/ Portfolio List

1. It Facilitate the User to set up Market Watch Screen 2. And Facilitate to Set up his own portfolios. ON-Line Back up It facilitate the user to take Back up of All Orders & Trade Related Information, for current day only.

ON- LINE/ TABULAR Slips It Select the Format for Conformation slips.

About Window

This window displays Software related version numbers details and copy right Information.

Report Selection Window :

It facilitates to print each copy of Report at Any time. These Reports are

1. 2. 3. 4.

Open order Report :- For details of out standing orders Order log report :- for details of orders placed, modified & cancelled. Trade done today report:- For details of orders traded. Market statistics report:For details of All securities traded

information in a day.

Most Activity Securities Screen It shows most active securities, based on the total traded value during the day

Internet Broking 1. 2. NSE Introduced Internet trading system from February 2000 Client place the orders through brokers on order routing system WAP (Wireless Application Protocol) 1. 2. NSE.IT Launches the from November 2000 1st Step - getting the permission from exchange for WAP 2nd Step - Approved by the SEBI (Sebi Approved only for SEBI Registered Members) X.25 Address check X.25 Address check, is performed in the NEAT system, when the user log on in to the NEAT, system & during report down load request. Ticker Price (Tick Size)

Ticker Price Rs. 0.05

FTP (File Transfer Protocol)

1.

NSE Provide for each member a separate directory (File) to know their trading DATA, clear DATA, bill Trade Reports.

2.

NSE Provide in Addition A common directory also, to know circulars, NCFM & Bhava copy information.

3. 4.

FTP is connected to each member through VSAT, leased line and internet. VSAT (from 4:15PM to 9:30 AM), Internet ( 24 Hours).

Bhava Copy Data Base Bhava copy data provides summary information about each security, for each day (only last 7 days Bhava copy file are stored in report directory.) Note: Details in Bhava copy- open price, high and low prices, closing prices traded value, traded volume and No.of transactions.

Snap Shot Data Base

Snap shot data base provides Snap shot of the limit order book at many time points in a day. Index Data Base Index Data Base provides information about stock market indexes.

Trade Data Base Trade Data Base provides, a data base of every single traded order, take place in exchange. Q. Snap Shot Data Base of NSEIL provides A. Summary information about each security for each day Bhavacopy B. Information about stock market indexes Index database C. Snapshots of the limit order book, at many time points in a day-Snapshot database D. A database of every single trade Trade database BASKET TRADING SYSTEM

1.

Taking advantage for easy arbitration between future market and & cash market difference, NSE introduce basket trading system by off setting positions through off line order-entry facility.

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2.

Orders are created for a selected portfolio to the ratio of their market capitalization from 1 lakh to 30 crores.

3.

Offline- order -entry facility:- Generate order file in as specified format out side the system & up load the order file in to the system by invoking this facility in basket trading system.

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Participants in Security Market

1. 2. 3. 4. 5.

Stock Exchanges (Registered in SEBI) 23 Stock Exchanges Depositaries (NSDL, CDSL ) 2 Depositaries. Listed Securities - 9,413 Registered Brokers 9,519 FIIs 502 Highest Investor Population Total No. Investors 9.11 Lakhs 5.36 Lakhs 3.25 Lakhs 2.30 Lakhs 2.14 Lakhs 1.94 % of Investors in India 28.50 16.75 10.10% 7.205 6.75% 6.05%

State Maharastra Gujarat Delhi Tamilnadu West Bengal Andhra Pradesh

Investor Education & Protection Fund This fund used to educate & develop the awareness of the Investors. The following funds credited to IE & PF 1. 2. 3. 4. Unpaid dividends Due for refund (Application money received for allotment. Matured deposits & debentures with company. Government donations. Private company ( Companies Act 1956)

According to the companies act private company defined as :1. 2. 3. Restrict the right to transfer of shares Limit the number of members to 50 Prohibit any invitation to public to subscribe any shares & deposits. Public Company

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According to the companies Act 1956 public companies means which is not a private company. Differences between Private Company & Public Company Private company Public Company Paid up Capital Minimum 1 lakh Minimum 5 lakhs Minimum Number of Members 2 Maximum Number of Members 50 Minimum Directors 2 Minimum Number of Members 7 Unlimited Minimum Directors 3

Issue & Allotment of the Shares 1. Issued & subscribing a) Either Physical or dematerialized. b) Issuing capital exceed 10 crores compulsory issued in dematerialized. 2. 3. 4. Trading compulsory in dematerialized form. Allotment made until the beginning of the 5th day after the day from issue of prospectus. Listing is possible issuing not less than 10% of the total equity and minimum of 20 lakhs

Contract Act 1872

Contract must be satisfy the following points:1. 2. 3. 4. 5. Lawful agreement ( Not void Agreement) Free consent Lawful object Lawful consideration Relationship Broker (Principle) Sub Brokers & Dealers (Agents)

Holding of Shares ( Voting Right) disclosing obligation

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1. 2. 3. 4.

Any person or Director or officer or the company More than 5% share or voting Right With in 4th day inform to company is necessary. Company inform with in 5th day to stock exchanges is compulsory. First Started

Future trading : Chicago Board of Trading 1848 Financial Future Trading: CME (Chicago Mercantile Exchange 1919) Stock Index Future: Kansas city Board of Trade Options First Trade: Holland Tulip Balabmania

BROKER (Trading Member) (Broker means a member in recognised stock exchange) 1. Eligibility: 21 years, graduation, 2 years experience in stock market relative affairs and 30 lakhs paid up capital 100 lakhs net worth 125 lakh interest free security deposit 25 lakhs collatery security deposit 1 lakh annual business subscription For individual, firms & corporate companies also

2.

Necessary Infrastructure:- Office space, Manpower, Equipment

3.

Disciplinary Proceedings: - Not convicted involving fraud & dishonesty

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4.

Fitness:- Not Bankrupt, Not default in any stock exchange, not previously refused by NSE, fully discharged from Debts by creditors (self declaration)

5.

First Send Application to stock exchange for broker ship- stock exchange send that application to SEBI 30 days SEBI satisfy above 1 & 2 points to grant Certificate of Registration.

6.

Maximum Commission of the broker 2.5% (including sub broker commission 1.5%) on Cash Market and Feature Market Buy and Sell Values but option Market 2.5% is charged on (Strike Price + Premier) Value.

7.

Contract note issued and signed by broker or authorized signatory within 24 hours.

8.

On contract note printed both offices registered office and dealing office address is must.

9.

Each trading member (broker) in F&O segment of NSEIL (NSE India Limited) can have as many users as he wishes.

10. Compliance Officer is appointed by the Broker. 11. Membership transfer fee Rs. 1 Lakh.

12. Dominant Promoters

a)

For individual (not exceeding 4 members) his & his spouse not less than 51%. 1 Person Graduation is compulsory. For Firm: - not less than 51% his & his spouse, 1 Person Graduation is compulsory. childrens & brothers

b)

c)

Corporate company:- Not less than 40% of the directors share holding (at least 50% each director) 2 Directors Graduation is compulsory.
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BROKER - CLIENT RELATION SHIP 1. 2. 3. Fill the client Registration Application form (for all details of clients). Agreement on non-judicial form ( Specified by SEBI that form). PAN, Pass Port, Driving License or Voter Identity card(SEBI Registration Number in case of FIIs) Pan Cards is must to future and option trading. And than Allot Unique client code. Take copy of instruction in writing before placing order, cancellation & modification. If order value exceed 1 lakh maintain the client record for 7 years. On conformation any order, issue contract note within 24 hours. Collect margin of 50,000 & multiple with 10,000.

4. 5.

6. 7. 8.

Note: PAN is compulsory if the transaction cost exceed Rs. 1 lakh.

9.

Issuing the know your client form is must.

For Continuing Membership - Trading Member fulfill the following documents.

1.

Audited two important Financial settlements ( profit & loss account, balance sheet) Net worth certificate (Certificate by CA)

2.

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3. 4.

Details of Directors, share holders (certificate by CA) Renewal Insurance covering proof. NSCCL Charged penal charges (penalty points) to members (causing following failures)

1. 2. 3. 4. 5.

Failure to funds obligations Failure to security delivery obligation. Gross exposure turnover violations. Margin shortages Security deposit shortage.

6. Client code modifications & non confirmation of custodial trades. Note : Penalty points charged on calendar month basis.

Maintaining And Preserving Books Of Accounts By Trading Member

1.

Up to 5 years, must be maintaining these books, by trading member. a) b) c) d) e) f) g) Registrar of transaction (Soudha Book). Client ledger. General Ledger. Journal. Cash Book. Bank Pass Book. Document register ( Particulars of Securities received and delivered).

2.

Up to 2 years, must be maintaining these books, by trading member. a) b) c) Members contract book. Counter foils of contract notes. Return consent of clients ( at the time order place). SUB BROKER
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1. 2. 3. 4. 5.

Eligibility:- 21 years, 10+2 qualification and paid up capital Rs. 5 lakhs. Not convicted involving fraud and dishonesty. Not debarred by SEBI previously. 51% of shares as dominant promoters his/her and his/her spouse. First application to stock exchange- Stock exchange send his application to SEBI- SEBI satisfied issued Certificate of Registration A registered sub-broker, holding registration, granted by SEBI on the Recommendations of a trading member, can transact through the member (broker) who had recommend his application for registration. Maximum Brokerage commission 1.5%. Purchase note and sales note issued by the sub broker with 24 hours. Investor Protection Fund

6.

7. 8.

1. 2.

Investor protection fund setup under Bombay public trust Act 1950. IPF maintained by NSE. Exact name of this fund is NSE Investors Protection Fund Trust. Any Member defaulted the IPF paid maximum 10 lakhs only to each investor. Client against default member, customer have right to apply within 3 months from the date of Publishing notice by a widely circulated minimum one daily news paper.

3. 4.

Demat of the Shares 1. Agreement with depository by security holder ( at the time opening the demat account)

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2. 3.

Surrender the security certificates to issuer (Company) for cancellation. Issuer (company) register the name of the depository as registered owner in his records. Participant (Company) inform the depository about the transfer of the shares. Depository record the transferee name as beneficial owner in book entry form in his records. Each custodian / clearing member is require to maintain a clear pool account with depositories. The investor has no restriction and has full right to open many (Number of) depository accounts Shares or securities are transferred from one account to another account only on the instruction of the beneficial owner. ISIN (International Securities Identification Number)

4. 5.

6.

7.

8.

Any company going to for dematerialised with shares that company get this ISIN for demat shares. ISIN is assigned by SEBI. ISIN is allotted by NSDL. Main objectives of Demat Trading

1. 2. 3.

Freely transferability Dematerialised in depository mode. Maintenance of ownership records in book entry form.

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Short term capital (according to the Income Tax Act 1961). Not more than 36 months immediately proceeding the date of its transfer for any asset. Not more than 12 months immediately proceeding the date of its transfer for any security UTI units and mutual fund units.

Risk in Settlement 1. Counter Party Risk. a) Replacement cost risk Short/long covering risk. b) Principle risk counter party default. c) Liquidity risk failure of the settlement of the transaction d) Third party risk failure of the clearing of the settlement by clearing bank. 2. System risk a) Operation risk arise by error, fraud, out ages. b) Legal risk law do not support the settlement. c) Systemic risk failure of the one party leads to failure of the other parties.

BROKING COMPANY HIERARCHY

Corporate Company- (Highest Positions in Hierarchy)

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(Chief corporate manager) Branches (Middle Position in Hierarchy) (Chief -Branch Manager) Dealer (Lowest Position in Hierarchy) (Chief -Dealer)

Corporate Manager:-

He has the right to see all branches and dealers out standing orders, previous trader, net positions & end of day reports to set the branch order limits

Branch Manger:Same as above rights on under his dealers. Dealer ( User):-

He has the right to perform orders & trading activities.

ELIGIGBILITY CRITERIA OF CLEARING MEMBER (Clearing Member means a member in NSCCL) Net worth Interest free security deposits Collateral security deposit Annual Subscription (minimum) : : : : 300 lakhs 34 lakhs 50 lakhs 2.5 lakhs

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Note: 1) Net worth must include minimum liquid net worth 50 lakhs 2) Liquid net worth means cash, deposits, B.G, T.Bills, Government Securities, dematerialized shares. CLEARING MEMBERS FUNCTIONS Enquiry of Trade Confirmation of trade Clearing & Settlement NSCCL & CLEARING BANK 1. Clearing Members are three types

A. Trading Member cum Clearing Member : A clearing member who is also a trading member such clearing members may clear & settle there own proprietary trades, their clients trades as well as trades other trading members. B. Clearing Member (or) Self Clearing Member : A clearing member who is also a trading member, such clearing member may clear and settle only their own proprietary trades and their clients trades but cannot clear and settle trades of other trading members. C. Professional Clearing Member : A clearing member is not a trading member such clearing member clear and settle other trading members transactions. Ex : Individuals, Institutions. 2. 3. 4. 5. 6. 7. 8. Clearing members must be members in NSCCL. Settlement guarantee fund capital deposited by members in NSCCL. Clearing and the settlement guarantee is settled by NSCCL Initial Margin charged by NSCCL. Every clearing member must open a separate account in clearing bank with NSCCL Funds settle by clearing bank through cash. Each clearing member (custodian) maintain a clear pool account with depositories (NSDL and CDSL) by prescribed pay-in- time for security is required.

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TYPES OF ORDERS 1. 2. 3. 4. Day order. System cancel the order Automatically at the end of day. Order cancel from the system at the end of the day

GTC (Good till cancel). of the expiry date period.

GTD (Good Till Date). This order stay in the system up to specify the number of days (not exceed). IOC (Immediate Or Cancel). When an order enter in the system, it is searching for the matching. If matching is not traced the order immediately cancelled. Stop Loss Orders:Long Orders Spot Trigger Rs.100/Rs.95/- (Buy) Short Orders Spot Trigger Rs.100/Rs.105/- (Sell)

5.

Limit Price Rs.93/- (Sell) (Stop loss order)

Limit Price Rs.108/- (Buy) (Stop loss order)

An order which is activated when a price crosses a limit is called stop loss order. Settlement Basis Cash Market T+2 F&O Market T+1 Note: Stock option final settlement only is T+3 Final Settlement of future and option contracts takes at the closing Price of the under laying asset. MARKET WATCH WINDOW SHOW THE CORPORATE ACTIONS WITH THE FOLLOWING INDICATORS. XD XB XI XR CD CB CI CR X* C* Ex - Dividend Ex - Bonus Ex Interest Ex Rights Cum Dividend Cum Bonus Cum - Interest Cum Rights in case more than one of XD, XB, XI, XR in case more than one of CD, CB, CI, CR

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ODD LOT MARKET Market Type : Book Type : O OL

Only Physical share trade Order quantity Not exceed 500 shares Settlement : Trade to trade (T) Retail Debt Market Face value Lot size Ticker size Mkt Type Book Type Operating range : : : : : : Rs. 100/10 Rs.0.01 D RD + 5%

FULL MESSAGE DISPLAY OPTION 1. Full message display option is possible to filter (chose) the messages according to the message code, symbol, series, PRO / CLI / WHS, client date and time. 2. Message area shows order conformation / modification / cancellation and rejection, trade conformation / modification / cancellation and rejections according to the user id. 3. In message filter screen, message code shows, by default All 4. The user desires to view all messages, All has to be specified in the place of message code, and the client account field should be blank. 5. In case the desired to view trading members own order / trade related messages, Pro has to be specified with the trading message code, defaulting in the Client Account field. 6. In case the user desired to view client order / trade related messages, Cli has to be specified with the client account code, in the Client Account field. MESSAGE CODE Pro CLI ALL AUC AUI LIS ORD Other SPD SYS TRD DESCRIPTION OF MESSAGE SELECTED Trading Number Code Client code All Messages Ex Interest Auction Order / Trade Message Auction Initiation Message All Listing related message Order related message Miscellaneous Security Suspension and De Suspension System Message Trader

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Auction Market Book Type 1. a) b) c) 2. 3. 4. 5. : AO

Parties in Auction Market Initiator (buyer). who initiates the auction process is called Initiator . Competitor (Competitive buyer). Who enter the same side of the initiator is called competitor Solicitor. Who enter the opposite side of Solicitor. Auction trade take place at the Auction Price (Solicitor order Price). The user is not allowed to modify any auction order ( initiator order, competitor order and solicitor order. The user can cancel only solicitor order ( No power to cancel initiator order & competitor orders). The system calculate trading price for the auction and all possible trades for the auctions are generated at the calculated trading price. the Initiator is called

Auction enquiry for user:S M F X P - Auction is in solicitor period - System is matching the order - Auction is over - Auction is deleted - Auction is pending & yet to begin. Order Value limits 1. 2. 3. Market price protection functionality by default set to 5% of the LTP. Branch order value limit:- Is set up company based on end of day reports. User order value limit: Cumulative value of orders of all securities is by default Zero user order value limit is setup by branch manager or corporate manager based on end of day reports. END OF DAY REPORTS USEFUL TO 1. 2. 3. For Corporate Manager : Set branch order value limits For branch manager: Set user order value limits For User: Perform orders & Trade activities. by corporate manager of the broking

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SHANKAR Broking Company Chenni Rs.700 Lakhs) X Y Z Rs. (?) M Rs.350 Lak Calcutta (Rs.650 lakhs) N Rs.75 Lak

Rs.250 Lak Rs.300 Lak

ABK Broking Company Bombay (Unlimit) A B C Rs. (?) P Hyderabad (Rs.800 lakhs) Q R S Rs. (?)

Rs.550 Lak Rs.400 Lak

Rs.400 Lak Rs.300 Lak Rs (?)

Circuit Breaks for index 10% moment -Before - After Before - After 15% moment -Before - After Before - After 20% moment 1 .00 PM 1.00 PM 2.30 PM 2.30 PM 1 .00 PM 1.00 PM 2.00 PM 2.00 PM 1 hour halt No Trading hour halt No Halt 2 hour halt 1 hour halt

No Trading as on the day. PRICE BANDS FOR STOCKS 2% 5% 10% 20%

-No price bands applicable to derivative scripts -Auction market price band 20%

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TRANSACTION CHARGES & INVESTOR PROTECTION FUND CHARGES Transaction charges paid by trading member:- Rs.2/- per lakh (each side) or one lakh, which ever is higher on Index Future and Stock Futures Values. But in option market charged on (Strike Price + Premium ) Value Investor protection fund charges paid by trading member:- Rs.1/- per 100 Crores (each side). MARGINS IN CASH MARKET

GROUP I

1.

At least 80% of days traded previous 18 months

2.

Mean impact cost less than one or equal one

GROUP II

1.

At least 80% of days traded previous 18 months

2.

Mean impact cost more than one

GROUP III

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1. All remaining shares in Group III

Note: Mean impact cost is calculated 15 th settlement basis

of

each month on rolling

MARGINS

Group I

15%

Margin

Group II

30%

Margin

Group III

45%

Margin

Note:

Minimum Margin Rs.50,000/- for each client.

EXPOSURE LIMITS IN CASH MARKETS

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GROSS EXPOSURE LIMIT

(1)

Gross Exposure Limit calculate on cumulative net outstanding position (Buy values sell values) of the member

Upto One Crore (Total Basis Capital (NSCCL)

: 8.5 Times

Above One Crore (Basic Capital In NSCCL) : Upto One Crore 8.5 Times above

One Crores 10 times

Gross Intraday Turnover limits

(2)

Gross Intraday Turnover is calculated on cumulative net outstanding position on each security (Buy + sell) of the member, at any point of time.

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Base Capital (in NSCCL)

x 33 1/3 times

Example: 3 Crores Base capital x Intraday turnover

33 1/3 times = 100 Crores

Gross

VAR Margin for Institutional Trades:

(3)

VAR Margin is charged at differential rate on the net out standing sales position of the client on under-laying asset spot price.

On-line Exposure Monitoring

A system of alert has been built in so that both the member and NSCCL are alerted as per preset levels (reaching 70%, 85%, 95% and 100%) when the members approach their allowable limits.

Exposure limit Violation

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Members exceeding the gross exposure limit are not permitted to trade with immediate effect (Trading Terminals are disabled automatically) until the members cumulative gross exposure is reduced to below the allowed gross exposure limits.

ARBITRATION

If Any trading member neglects or fails to carryout any award to arbitration made in connection with the exchange rules, bye-laws and regulation is necessary.

NSE DATES WISE DATA

NSE incorporated

November 1992

Base value of Nifty (at 1000) started

Nov, 3 1995

Index future

June 2000

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Index Option

June 2001

Security (Stock) option

July 2001

Security (Stock) future

Nov 2001

S & P CNX Nifty have 50 scripts

Sensex have 30 scripts

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SOME IMPORTANT BITS

1.

NYSC (New York Stock Exchange) is the American stock exchange but it does not trade derivatives.

2.

An application for arbitration can be filled within 6 months from the date of dispute is obligation to client.

3.

The daily margin in T+2 rolling settlement comprises of MTM (mark to market) margin & value at risk (VAR) based margin.

4.

A client shall make payment for security purchase to the trading member before the funds pay in day

5.

It is a compulsory for a trading member to maintain a separate bank account for the client? Yes.

6.

A copy of advertisement has to be submitted by a trading member to NSE for prior approval before its issue in publication / media.

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7.

Full message window LIS indicates all listing related messages.

8.

Stock exchanges does not issue securities in primary market.

9.

Which of the following statement/s is TRUE on the NEAT system?

a)

Disclosed quantity orders cannot be modified to such a quantity where the disclosed quantity is greater that the order quantity.

b)

Expect for the Limited Physical market, a user cannot modify an order to a quantity less than the specified revealer lot and multiple of regular lot.

c)

Orders cannot be modified to a quantity greater than the issued capital for the security.

Ans:- Statement (A), (B) and (C)

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10. Which of the following is not true about Mark to Market Margin?

a)

Mark to Market margin is computed on the basis of mark to market loss of a member.

b)

Mark to Market margin is calculated by marking each transaction in a scrip to the closing price of the scrip at the end of trading.

c)

Mark to market profit/loss across different securities within the same settlement is set off to determine the mark to market loss for a settlement.

d)

Mark to market loss is the notional loss which the member would incur in case the cumulative gross outstanding position of the member in some securities were closed out at the close price of the securities.

Ans:- d

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11. Which of the following is FALSE about auctions in the NEAT system?

a)

All auction orders are entered into the auction order book.

b)

Auction order matching takes place at the end of the solicitor period for the auction.

c)

Auction matching takes place only across orders belonging to the same auction.

d)

All auction trades take place at the last traded price for that day in the regular lot book in the normal market.

Ans:- d

12. Which of the following statements is FALSE about the NEAT system?

a)

The order / trade slips are confirmation / modification / cancellation / rejection slips.

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b)

Members can take print of confirmation slips at the end of the day from the reprint option in the supplementary menu.

c)

Margin report is generated on line.

d)

The trade and order slips are generated on line.

Ans:- c

13.

which of the following statement/s is TRUE about trade cancellation in the NEAT system.

a)

The trade cancellation request is sent to the Exchange for approval and message to that effect is displayed in the message window.

b)

When a request for the trade cancellation is approved by the Exchange, the parties to trade receipt system message confirming the trade cancellation and the trade cancellation slip is printed at their respective trader work stations.

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c)

If the exchange rejects the trade cancellation request, the trade cancellation rejection slip is print at their respective trader workstations.

Ans:- a,b &c

14. Which of the following is are TRUE about the ticker in the NEAT system?

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a)

The user has the option of selecting the securities that should appeat in the ticker.

b)

When a request for the trade cancellation is approved by the Exchange, the parties to trade receipt system message confirming the trade cancellation and the trade cancellation slip is printed at their respective trader workstations.

c)

The ticker displays information about any trade in the system as and when it takes place.

Ans:- a,b &c

15)

A trading member has the right to enter and exit from the member ship of the exchange.

16) Which country having the highest listing companies

Brazil

Italy

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Mexico

* China (Hong Kong)

* Japan

Canada

* America

* India

17) Which Index is Highest Trade in World Indices.

a) Nifty

b) Hong Song

c) Nikky

d) None of the above.

18) Which of the follwing doesnt raise mututal funds. a) IDBI Principle c) UTI Units b) Franklin Templeton d) NSE / BSE / RBI

19) Which of the following stock has high liquidity ? a) All infotech stocks b) CNX Nifty Junior c) Nifty Index stocks d) All listed companies 20) Initial Margin Collected on ______________________ a) Up Front Margin c) T -1 b) T + 1 d) End of the Day

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The user is automatically disabled if _________ attempts are made by a user with incorrect password. a) b) c) d) 1 2 3 4

__________ displays the permissible price band for a security for the current trading day. a) b) c) d) Price Range Daily Price Range Market Watch Market by Price

Which of the following is CORRECT regarding Market Watch screen in NEAT? a) The purpose of market watch window is to setup and view trading details of securities that are of interest to users. b) For each security, market information such as best buy price, best sell price, last traded price, etc. are displayed. c) Market watch screen is the focal area for the users. d) Only a & c e) a, b & c Which of the following option displayed on invoking log-off screen? a) b) c) d) Permanent sign-off & temporary sign-off Permanent sign-off & exit Permanent sign-off, temporary sign-off & exit Exit only

_____________ enables the user to view messages broadcast by the Exchange such as corporate actions, market news, auction related information, order modification, order cancellation etc. a) b) c) d) Ticker window Message window Market watch window Market message window

Which of the following symbol is used to indicate that a security is Ex-Bonus?

41

a) b) c) d)

Bonus Ex-B XB EB

Which of the following is NOT a purpose of Market By Price in NEAT system? a) MBP enables to view outstanding order in the market b) The order appears in a Price/ Time priority with BEST PRICED at the top. c) It displays information of number of buy orders, sell order price, gross orders etc. d) It displays permissible price band for a security e) It displays market type, symbol, series, total traded quantity, LTP, % change in LTP. ____________ shows all the activities that have been performed on any order belonging to that user. a) b) c) d) Market Watch window Activity Window Activity Log Message Log

Which of the following term displayed in activity log to indicate that the order was cancelled? a) b) c) d) AC OC ORC OX

_________________ is a feature available in the system to get instantaneous market information on a desired security a) b) c) d) Snap Quote Market Movement Activity Window Market Watch

Which of the following symbol is displayed in Auction Inquiry to indicate Auction is Over? a) b) c) d) S M F X

42

32. _____________ is a facility for setting up the securities in the market watch screen and also to setup the users own portfolio. a) Market Watch b) Security / Portfolio list c) Market By Price d) Basket Trading 33. Which of the following is FALSE about the facilities of Online Backup? a) This facility is used to take back-up of all order and trade related information b) This facility is used to generate contract notes c) This facility generates two ASCII files namely order.txt & trade.txt d) This facility can only be availed by logging into NEAT system only. 34. Which of the following is not a supplementary function of NEAT system? a) Report selection & Online Backup b) Full Message display c) Most Active Securities d) Activity Log 35. What do you mean by the message code AUC in full message display option? a) Auction Order/Trade messages b) Auction Market messages c) Auction Securities messages d) Auction initiated

36. ____________ window allows the corporate manager & branch manager to specify the number of copies to be printed for each report. a) Report Print selection b) Report selection c) Print selection d) Report Print window

37. ______________ facility allows the user to have a drop down list of client codes and to modify, add, upload nor delete clients. a) Client Master b) Client Maintenance window c) Client Master Maintenance d) Client Manager window 38. The order attribute selection enables the user to set default parameters for two fields PRO/CLI/WHS and _________ Id fields in the order entry screen. a) Client b) Member c) Custodial Participant

43

d)

Institutional

39. When an order enters the trading system, it is an________ order. It tries to find a match on other side of the books. If it finds a match, a trade is generated & if not the order becomes a ________ order and sits in _____________ book. a) Active, Passive, Order b) Passive, Active, Trade c) Active, Passive, Trade d) None of the above 40. The following are the different order books available in Capital Market segment except, a) Regular Lot Book & Odd Lot book b) Special Terms Book & Stop Loss book c) Negotiated Trade Book & Auction order book d) None of the above 41. Which of the following is NOT TRUE about Stop Loss Book in NEAT system? a) SL orders entered into market when the LTP for that security reaches the trigger price b) Before triggering, the order participates in matching c) Untriggered stop loss order are stacked in stop loss book d) Stop Loss orders can be either a market or limit order 42. Which of the following is CORRECT relating to Special Term Book? a) Special Term orders are those orders which have special term attribute attached to it. b) Special term order scans the orders existing in special terms as well as regular lot book c) Special terms can be MF or AON. d) All of the above

43. AT OPENING PRICE (ATO) is a price, arrived at by system at the end of _______ phase. a) Pre-open b) Opening c) Open d) Market Close 44. Which of the following statement(s) is /are NOT TRURE about Trade Modifications? a) Approval form Exchange is must for trade modification

44

b) c) d)

The quantity for trade modification must be lower than original trade quantity. The dealer can request for trade modification for any trades of his branch. The user can request for trade modification by using the function key provided.

45. Auctions are initiated by the ____________ on behalf of Trading members for settlement related reasons. a) b) c) d) RBI SEBI Exchange Solicitor

46. Which of the following statement(s) is/are FALSE relating to Auction Market? a) b) c) d) Competitor orders are the orders, which compete with initiators orders. After completion of competitor period, the solicitor period starts. Order matching takes place after initiator period. Competitor & Solicitor period for any auction are set by the exchange

47. Which of the following statement is NOT CORRECT regarding Bhav Copy? a) Bhav Copy is downloaded in reports directory on daily basis. b) It is downloaded immediately after market close time. c) Only last seven Bhav copy files are stored in reports directory. d) Bhav copy file comes with file extensions .ms & .md 48. Which of the following indicator is displayed for a security, when the company for the security announces Extraordinary General Meeting (EGM)? a) XO b) XE c) XD d) XB 49. Internet trading on NSE started from ___________ a) January 2000 b) February 2000 c) March 2000 d) April 2000

45

50. What is a Trades Done Today report/file? a) It is a file, which shows the details of the trading activities of the Trading Member b) It gives the details of trades done today by all dealers of the TM. c) It shows the details of order & trade related activities of the TM. d) Only a & b

51. Which of the following is/are NOT TRUE about Order log in NEAT system? a) b) c) d) Order log gives the report, which shows the activity log of the orders for all dealers of TM. Order log shows the details of the orders which are entered & modified Order log comes with a file extension cld/bld. None of the above.

52. Which of the following is/are TRUE about Order/Trade slips generated in NEAT system? a) Trade & order slips are generated on-line b) Various order/trade slips are confirmation/modification/cancellation/rejection slips. c) Members can also take print of confirmation slips at the end of day from reprint option. d) Members are required to keep the trade confirmation slips for a period stipulated by NSE. e) All of the above. 53. Which of the following validation checks are performed to verify competitor & solicitor orders? I For a competitor order - the auction in which order is desired is in competitor period II III a) b) c) d) For a solicitor order-the auction in which order is desired is either in competitor or solicitor period Auction order entry in auctions, which are yet to in pending state or which or cancelled is prohibited. Only I & II Only I & III All of the above statements None of the above statements

54. _________ is a party who enters on the opposite side as of the initiator. a) Competitor b) Exchange c) Initiator d) Solicitor

46

55. Which of the following indicator is displayed when a scrip goes ex-dividend on a trading day? a) XB b) XD c) X* d) ED 56. Which of the following indicator is displayed against a security, if that security comes along with rights? a) XR b) CR c) ER d) X* 57. Which of the following check(s) is/are performed by the NEAT before a trade is effected? Statement I - The security in which trade is to be effected is not suspended form operations. Statement II Trading members involved in trade are not suspended form operations. Statement III Turnover limits for the trading members involved are not exceeded. a) b) c) d) All the three only I & II only II only I & III

58. When a request for trade cancellation is rejected by the exchange a ____________ slip is generated at the traders workstation. a) Trade cancellation b) Rejection of Trade c) Trade Rejection d) Trade Cancellation Rejection 59. ______________ report gives the details related to all the securities traded on that day and information regarding Open, High, Close, Previous Close & % change. a) Market watch b) Full message c) Market Statistics d) Market Inquiry 60. Which of the following option enables a user to cancel multiple outstanding orders in various trading books? a) Order Cancellation b) Quick Order cancellation c) Multiple Order cancellation d) Multiple cancellation
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61. Which of the following is generated when a request for order modification is place in NEAT? a) Order confirmation slip b) Order modification slip c) Trade modification slip d) Order request slip 62. Which of the following is FALSE in regarding order cancellation in NEAT system? a) Order cancellation can be done during trading hours by selecting the function Tkey. b) Order cancellation is available for all book types. c) User can cancel auction initiator & competitor orders in auction market d) Order cancellation not allowed for NT that has not resulted as an alert. 63. Which of the following statement(s) is/are FALSE about Order Modifications? a) Corporate Manger cannot modify order details such that it exceeds the branch order value limit set for the day b) Order modification can be performed by a TM who is deactivated by the exchange. c) A corporate manager can modify his own trades as well as orders of all dealers of TM. d) All of the above 64. Branch order value limit can be set by ________________ a) Branch manager b) Corporate manager c) Either of a & b d) Both of a & b 65. An order that has no specified condition associated with it is called as ________ order a) Regular Lot b) Negotiated Trade c) Special Terms d) Stop Loss 66. Order entry is not possible for a security in normal market, if the security is ________ from trading or _________ to trade. a) suspended, defaulted b) suspended, not eligible c) not permitted, suspended d) defaulted, not eligible 67. If a security is not eligible to trade in the normal market, a message _______________ is displayed on order entry screen. a) security not eligible to trade b) security not permitted to trade

48

c) d)

security suspended from trading security defaulted to trade.3

68. Which of the following is NOT CORRECT about negotiated trades? a) to enter negotiated trade order details, NT should be selected. b) It is optional for a trading member to enter counter party TM Id. c) Approval of exchange is must for negotiated trades. d) Two trading members can negotiate a trade outside the exchange. 69. __________ order allows the user to bur or sell a security as soon as the order is released into the system. a) Immediate or Cancel b) Cancel c) Minimum Fill d) All or None 70. _________ order allows the user to specify minimum quantity for which order should be traded a) Immediate or Cancel b) Minimum Quantity c) Disclosed Quantity d) Minimum Fill

71. The margins payable by member comprises of _____________. a) Mark to Market margin & Value at Risk based margin b) Mark to Market margin, Value at Risk based margin & Intraday Turnover c) Mark to Market margin, Value at Risk based margin & gross exposure d) All of the above 72. Which of the following is NOT true about Mark to Market margins? a) It is a notional loss, which a client would incur on his cumulative net outstanding positions in all securities. b) It is calculated by multiplying the difference between the close price and price c) MTM profits across different securities within settlement are not allowed. d) MTM profits across different settlements are not allowed. 73. The rate which is applied to gross exposure to determine the Value at Risk based margin is called as __________. a) Var Rate b) Close-out rate c) Market rate d) Price band 74. Which of the following funds, is used to complete the settlement incase a trading member fails to meet settlement obligations? a) Investor Protection Fund

49

b) c) d)

Settlement guarantee fund Settlement fund Settlement protection fund

75. Margins are calculated for members, security wise on a ________ basis across clients. a) Gross b) Net c) Outstanding d) Delivery 76. The ___________ has all the rights & obligations associated with securities. a) Beneficial Owner b) c) d) Depository Registered Owner Depository Particpant

77. The maximum amount of compensation/claim payable from the Investor Protection Fund is _____________ a) b) c) d) 5 lakhs 10 lakhs 15 lakhs no maximum limit

78. Which of the following is utilized to settle claims of such investors where the trading member through whom the investor dealt has been declared defaulter. a) Settlement guarantee fund b) c) d) Settlement fund Investor protection fund Investor protection & education fund

50

79. No delivery period for a security is set up by ___________ a) the issuer of that security b) exchange c) SEBI d) NSCCL 80. The time gap between two book closures / record dates shall be __________. a) 15 days b) 30 days c) 45 days d) 60 days 81. What do you mean by ISIN? a) International Share Identification Number b) Indian Securities Identification Number c) International Shares Identification Number d) International Securities Identification Number 82. Which of the following statement(s) is/are TRUE about ISINs? A - NSDL allots ISINs for demat as well as physical shares. B - The ISINs allotted by NSDL does not any point of time breach the uniqueness of ISIN of physical form C - ISIN for a security is allotted when the security is admitted to NSDL. a) b) c) d) only A only A & C only B & C All of the above statements

83. The conversion of electronic form of security from physical form is called as ________. a) Dematerialisation b) Rematerialisation c) Materialisation d) Hypothecation 84. The name of the ______________ appears in the record of the depository. a) Depository Participant b) Depository c) Beneficial Owner d) Registered Owner 85. Investor Protection Fund has been set up as a trust under _______________ a) SEBI Act 1992

51

b) c) d)

SCRA Act 1956 Bombay Public Trust Act 1950 Investor Trust Act 1996

86. The purpose of ___________ functionality is to provide information to the market about the buy-back trades executed from the start of the buy-back period till current trading day. a) Buy-Back Trades b) Normal Market c) Limited Physical Market d) Buy-Back Market 87. Which of the following is FALSE about RETDEBT orders? a) RETDEBT orders can be entered into the system by selecting the RETDEBT order book b) These orders scan only the RETDEBT order book for potential matches. c) If no suitable match is found, the order stored in the book as passive orders. d) To enter orders in the RETDEBT market, the book type is to be selected is R. 88. Which of the following happens, if index upward/downward direction? a) trading will be halted for hour b) trading will be halted for 2 hours c) trading will be halted for the remaining day d) trading will continue or sensex moves 20% in

89. What is the price band applicable for securities in auction market? a) 10 b) 15 c) 20 d) None of the above 90. Which of the following statement(s) is/are TRUE about salient features of Limited Physical Market? A. Trading is conducted in the odd lot market (market type O) with book type OL & series BT B. Order quantity should not exceed 500 shares & settlement for all trades are done on a trade for trade basis & delivery obligations arise out of each trade C. Price bands applicable in Limited Physical Market are same as those applicable in Normal market. a) Only A & B b) Only B & C c) Only B d) A,B & C 91. What is the permitted lot size in Retail Debt Market (RETDEBT)? a) 8

52

b) 9 c) 10 d) 11 92. How many banks have been empanelled by NSCCL, in the list of clearing banks/ a) 8 b) 9 c) 13 d) 11 93. Which of the following steps is/are taken by NSCCL on account of settlement fund shortages? A. Trading may not be permitted B. Securities payout with held. a) Only A b) Only B c) Both A & B d) Either A or B 94. Which of the following for, the penalties are charged to members? a) Failure to fulfill funds shortages b) Margin shortages c) Security Deposit shortages d) All of the above 95. All shortages not bought-in are closed out at the highest price between the ______ of the trading till the day of squaring-off on the auction day plus ___________. a) b) c) d) First day , 20% Last day & 20% First day & 5% / 10% / 20% last day & 5% / 10% / 20%

96. What is the percentage of upfront margin to be collected for securities covered under Group II? a) 20% b) 30% c) 40% d) 50% 97. What is the Gross Exposure multiple (GE) for securities covered under Group III? a) 5.5 time b) 6.5 times c) 7.5 times d) 8.5 times

53

98. Which of the following report in clearing software provides security-wise information on daily purchases & sales and their value? a) Daily obligation statement b) Final obligation statement c) Purchase & Sales statement d) Daily purchases & sales statement 99. Which of the following not appears in the Daily Obligation statement? a) Settlement number b) Client Code c) Daily sales d) Daily purchases

100. ____________ report contains information of all custodial trades which are not confirmed by Custodians as of the day. a) Custodial statement b) Custodial trades pending confirmation c) Custodial trades pending d) Custodial trades confirmation pending 101. ___________ provides information on delivering centre, receiving centre, number of shares to deliver for each security and also the code of receiving entity. a) Final Delivery statement b) Delivery statement c) Securities Deliverable statement d) Securities statement 102. __________ provides details about the transactions effected in trading members clearing account at the clearing bank. a) Daily Funds statement b) Daily Funds Summary statement c) Funds statement d) Funds Summary statement 103. Which of the following statement provides the break up for each debit & credit appearing in daily funds statement? a) Daily Funds statement b) Funds Statement c) Funds Summary statement d) Daily Funds Summary statement

54

104. Which of the following statement provides details of the auctioned deliveries for which valuation price exceeds the auction trade price? a) Auction square up debit statement b) Auction square up credit statement c) Auction square up difference statement d) Auction statement 105. Which of the following not appears in securities delivered statement? a) quantity of shares to be delivered by constituent b) quantity of shares delivered c) quantity of shares delivered short d) quantity of shares to deliver 106. __________ report provides amount of margin payable & amount of exposure & MABC available. a) Consolidated Margin report b) Margin report c) Detailed margin report d) Daily Margin report 107. Which of the following report gives a listing of all securities in NO DELIVERY for a particular settlement type and settlement numbers? a) No Delivery statement b) No Delivery Securities statement c) No Delivery Period statement d) No Delivery report

108. Private company means a company which has a minimum paid-up capital of _______or such higher paid-up as may be prescribed by its articles. a) 1 Lakh b) 2 Lakhs c) 3 Lakhs d) 4 Lakhs 109. Which of the following is not treated as a Public Company? a) Company which is not a private company b) Company which has a minimum paid-up capital of 5 Lakhs rupees. c) Private company which is a subsidiary of a company which is not a private company d) Company which is formed by 2 number of persons 110. Which of the following conditions must be satisfied by the company before buying back its own shares? A. The buy-back must be authorised by its articles

55

B. Special resolution to be passed in general meeting of the company authorising buy-back C. The buy-back shall be or equal to or less than 25% of the total paid up capital. D. All the shares for the buy-back may or may not be fully paid up. a) only A & B b) only B, C & D c) only A, B & C d) only A, B & D 111. As per Public Debt Act 1944, ____________ means a security, created and issued by the Government for the purpose of raising public loan. a) Public Security b) Government Security c) Public Loan d) Government Instrument 112. An Indian company or any other company which, in respect of its income liable to tax, has made prescribed arrangements for declaration & payment of dividends within India is called as ______________. a) Domestic Company b) Public Company c) Private Company d) Widely Held company 113. A share held in a company or any other security listed in a recognized stock exchange in India or a unit of UTI, which is held for more than 12 months form the date of its purchase is called as ___________ a) Capital Asset b) Short term capital asset c) Long term capital asset d) Fixed asset.

114. Which of the following is not included in DIVIDEND as per section 2(22) IT Act, 1961? a) Distribution made to its shareholders by way of bonus to the extent to which the company possesses accumulated profits. b) Distribution made to its shareholders of a company on its liquidation to the extent to which the distribution is attributable to accumulated profits. c) Any advance to shareholder by a company in the due course of its business, where the lending of money is a substantial part of the business of the company. d) Distribution made to its shareholders by a company on reduction of its capital, o the extent to which the company possesses accumulated profits. 115. Base minimum capital is a requirement of ________. (a) SEBI Act, 1992 (b) the exchanges

56

(c) (d)

the exchanges subject to the minimum stipulated by SEBI Association of brokers in India

116. Which of the following is NOT true about corporate securities market reforms? (a) To ensure effective regulation of the corporate securities market, the SEBI Act, 1992 was enacted to empower SEBI with statutory powers. (b) Permission to access the international capital market was withdrawn. (c) Major part of the liberalization process was the repeal of the Capital Issues (Control) Act, 1947 in May 1992. (d) Indian companies were allowed access to international capital market through issue of ADRs and GDRs.

117. What is the minimum net worth for a corporate member in Capital Market and F&O segments of NSEIL? (a) Rs. 150 lakh (b) Rs. 100 lakh (c) Rs. 200 lakh (d) Rs. 300 lakh

118. What is the amount a trading member deposits while filing an application for arbitration? (a) no deposit is required since exchange bears the expenses of arbitration (b) Rs. 7000/(c) Rs. 8000/(d) depends on the amount of claim

119. Which of the following is TRUE about facilities available for the market watch screen in the NEAT system? A) The user has the option to set-up securities directly from the Security List without typing a single character on the market watch screen. (B) The user also has the option to add and delete the security set up in the market watch screen as many times as one desires (C)The user can print the contents of the Market Watch setup by the user

57

(a) (A) and (C) only (b) (B) and (C) only (c) (B) only (d) (A), (B) and (C)

120. Which of the following is the purpose of Balance Sheet? a) To show the operational position of a business. b) To show the financial position of a business on a particular point of time. c) Both a & b. d) None of the above. 121. What a) b) c) d) 122. What a) b) c) d) is the purpose of the Profit & Loss account? To show the financial position for a particular period. To show the profitability position for a particular period To show the financial position as on particular date. To show the profitability position as on particular date. do you understand by Time value of the Money? Different values for a unit of money in different time periods. Same value for a unit of money in same time periods. Different values for a unit of money in same time periods. Same value for a unit of money in different time periods.

123. The profits available to the ordinary share holders on a per share basis, after deduction of taxes are called as _____________________. a) Earnings per share b) Dividends c) Net profits d) Preference Dividends. 124. Financial Leverage ratio is also known as ______________________. a) Debt x Equity ratio b) Debt / Equity ratio c) Equity ratio d) Debt ratio 125. Which of the following ratio is used to judge the liquidity of a firm? a) Current assets ratio b) Profitability ratio

58

c) d)

Current ratio Debt / Equity ratio

126. The measure of risk (standard deviation) is calculated by ______________. a) Variance b) Square Root of variance c) Square of variance d) None of the above. 127. The ratio of Gross Profit margin to net sales is called as ___________________. a) Net sales ratio b) Liquidity ratio c) Profit margin ratio d) Gross profit ratio.

128. What a) b) c) d)

is the formula for calculating the future value of money? FV=PV x (1+r)t FV=PV x (1+r) FV=PV x (1+t)r FV=PV x (1+t)

129. Which of the following is true about private placements? a) It is cost & time effective method of raising funds. b) Not required detailed compliance with formalities c) Both a & b d) Only a 130. What a) b) c) d) 131. What a) b) c) d) e) is the estimated investor population in India? 15 to 20 million 15 to 30 million 15 to 40 million 15 to 50 million is the main reason for Corporates to enter in primary market for Issues? To meet long term capital needs To meet working capital requirement. For expansion of operations. All of the above Only a & b

132. The market where securities are brought and sold is called as ___________________. a) primary market

59

b) c) d)

secondary market stock exchange none of the above

133. Government Securities are issued and auctioned by ________________. a) Exchange b) RBI c) SEBI d) Both RBI & SEBI 134. Which of the following is not a market participant? a) RBI b) Money lender c) Merchant Bankers d) Under writers 135. What a) b) c) d) 136. What a) b) c) d) do you mean by GDRs? Global Depository Receipts Gold Deposit Receipts Gold Deposit Rates Gross Deposit Receipts is NCFM? National Certification for Financial Markets NSEs Certification in Financial Markets National Certification of Financial Markets National Certification in Financial Markets

137. Which of the following is FALSE about Reforms of Securities Market? a) FIIs have been permitted to invest in all types of securities. b) Indian Companies have been permitted to raise resources form abroad through issue of ADRs & GDRs. c) Indian companies have not been permitted to setup trading terminals abroad d) Trading platform of Indian exchanges accessible throughout world. 138. Which of the following is TRUE about NEAT? a) Trading system is called as NATIONAL EXCHANGE FOR AUTOMATED TRADING. b) It is an order driven system which matches buy & sell orders on price time priority. c) The system discloses the identity of buyer and seller. d) All of the above statements e) Only a & b 139. Derivative trading Index Future Market in India was introduced in _______________________. a) May 2000 b) June 2000

60

c) d)

July 2000 Aug 2000

140. Which of the following are considered very safe by the Indian Investors? a) Mutual Funds b) Units of UTI c) Bank Deposits d) Equity Shares 141. NCFM examination NOT allows the flexibility in terms of ______________ a) Candidates presence b) Testing centre c) Testing time d) Date of Test 142. Which of the following are the statutory powers of SEBI, which are empowered by SEBI Act 1992? a) Protecting the interests of investors in securities b) Promoting the development of securities market c) regulating the securities market d) All of the above 143. ________________ deals with issue, allotment and transfer of securities and various aspects relating to company management. a) SEBI Act 1992. b) Companies Act 1956 c) Depositories Act 1996 d) SCRA Act 1956

144. _____________ was passed to provide for the establishment of depositories in securities with the objective of ensuring free transferability of securities with speed & accuracy. a) SEBI Act 1992. b) Companies Act 1956 c) Depositories Act 1996 d) SCRA Act 1956 145. The governing regulators of securities market are __________________. a) Department of Economic Affairs, Securities Appellate Tribunal b) RBI, SEBI c) Only a d) Only b

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e)

Both a & b

146. ________________ provides for direct and indirect control of virtually all aspects of securities trading and the running of stock exchanges. a) SEBI Act 1992. b) Companies Act 1956 c) Depositories Act 1996 d) SCRA Act 1956 147. As per section 2 (h) of SCRA Act 1956, securities includes, a) Shares, scrips, stocks, bonds, debentures, debenture stock b) Derivatives, government securities, units or any other instrument issued by any collective investment scheme. c) Rights & Interests in securities. d) Only a & b e) a, b, & c 148. A contract which derive its value from the prices, or index of prices of underlying securities is known as ___________________. a) Derivative b) Options c) Futures d) Stock Futures 149. Which of the following are bye-laws of the Stock-Exchange? a) Opening & Closing of markets b) Regulation of hours of trade c) Fixing, altering or postponing the days of settlements d) Regulation of taravani business e) All of the above. 150. Which of the following should be comply with, in order to list the securities in an exchange? a) Listing agreement b) Listing Period c) Listing proposal d) All of the above

151. SCRA a) b) c)

Act 1956 is not applicable to ________________. RBI SEBI DCA

62

d)

DEA

152. Companies aggrieved with refusal of listing by a recognised stock exchange can make appeal to _____________. a) RBI b) SEBI c) DCA d) SAT 153. Which of the following is not required for the qualification for membership of recognised stock exchange? a) He is of twenty one years of age. b) He is citizen of India c) He has compounded with his creditors d) He has not been convicted of an offence e) He has not been expelled or declared defaulter. 154. Every member of a recognised stock exchange has to maintain & preserve the books of accounts for the period of ____________ a) 2 years b) 3 years c) 4 years d) 5 years 155. Every member of a recognised stock exchange has to maintain & preserve counterfoils or duplicate of contract notes issued to clients, for the period of ____________ a) 2 years b) 3 years c) 4 years d) 5 years 156. All the intermediaries in the market such as Brokers, Sub-brokers, Underwriters, Merchant Bankers are required to register with ________________. a) RBI b) SEBI c) NSE d) DCA 157. Which of the following is/are the functions of SEBI? a) Regulating the business in stock exchanges and other securities market. b) Promoting investors education and training of Intermediaries. c) Promoting Insider Trading regulations d) Only a & b e) a, b & c

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158. Number of Members in the Board of SEBI are _________ a) 3 c) 4 b) 5 d) 6 159. Which of the following punishment(s) is/are imposed by SEBI, for violation of provisions of SEBI Act 1992? a) Suspension or Cancellation of registration. b) Monetary Penalties c) Either a or b d) Both a & b 160. Which of the following punishment(s) is/are imposed by SEBI, for contravening any of provision of SEBI Act 1992? a) Suspension or Cancellation of registration b) Monetary Penalties c) Either a or b d) Both a & b 161. Any person aggrieved by an order of SEBI can appeal before _________ and incase by order or decision of SAT may file an appeal to ____________. a) SAT, High Court b) RBI, High Court c) SEBI, High Court d) NSE, High Court 162. Which of the following is NOT TRUE regarding Capital Adequacy Norms for Brokers? a) Every Stock Broker is required to maintain Base Minimum Capital b) Base Minimum Capital to be maintained is stipulated by SEBI c) The amount of Base Minimum Capital is same for all the exchanges d) Base Minimum Capital is used for giving exposure/turnover. 163. Which of the following is CORRECT about conditions for granting the certificate by SEBI to a Stock-Broker? a) He holds the membership of any Stock Exchange b) He shall abide by the rules, regulations, Bye-laws of stock exchange c) He shall pay the amount of fees for registration d) He shall obtain prior permission of SEBI in case of change in status or constitution e) All of the above 164. _______________ means any investor buying or selling securities on cash transaction for a market value not exceeding Rs.50000 in aggregate on any day. a) Small Investor b) Retail Investor c) Individual Investor d) Institutional Investor

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165. Which of the following is NOT a criterion for granting the certificate to a SubBroker? a) He has not been convicted in any offence b) He is of 21 years of age or more c) He is not qualified NCFM exam d) He has atleast qualified 12th standard equivalent examination 166. What is the maximum quantum of punishment imposed on any person found guilty for Insider Trading? a) Fine only b) Imprisonment only c) Fine or Imprisonment d) Fine and/or Imprisonment 167. Which of the following is/are prohibited by SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market ) regulations, 1995? a) Dealing in securities in fraudulent manner b) Market manipulation & Unfair trade practices relating to securities c) Misleading statements to induce sale or purchase of securities d) All of the above e) Only a & b 168. _______________ is a person whose name is recorded as such with a depository. a) Beneficial Owner b) Registered Owner c) Depository Participant d) Actual Owner 169. Any information which relates to the financial results of a company and is not generally known or published by that company is called as ________________. a) Financial Information b) Unpublished price sensitive Information c) Unpublished information d) Sensitive information 170. What do you mean by message code SPD in full message display screen? a) system messages b) security suspension messages c) suspension messages d) scrip details.

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171. Which of the below given statement is FALSE in relation to user order limit set up? a) Corporate manager can set order value limits for all dealers of a TM b) Corporate manger can set branch order value limits without assigning user order value limits c) User order value limit cannot be set as unlimited, if branch order value limit is set as specific value. d) Cumulative value of user order limits shall not exceed the corresponding branch order value limit.

172. ______________ is a facility, where the user can generate order file in a specific format outside the trading system and upload the file into NEAT system. a) outside order entry b) online order entry c) offline order entry d) order entry 173. Which of the following is the purpose of BASKET TRADING? a) to create offline order entry file for all securities b) to create online order entry file for all securities c) to create online order entry file for selected portfolio d) to create offline order entry file for selected portfolio 174. Which of the following message appears first when an order is place & trade executed for that order? a) Trade confirmation b) Order confirmation c) Both a & b d) None of the above

175. Which of the following windows is not displayed on trader workstation screen? a) Full message window b) Inquiry window c) Market watch d) Message window

176. Which of the following are special features of Market Watch screen? A Market Watch screen can be sorted alphabetically B The User has a facility to set up 500 securities in whole and 30 securities in one page of Market watch screen C An indication for corporate actions for a security is available in market watch. a) only A

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b) c) d)

only A & B only A & C A, B & C

177. The branch manager cannot view outstanding orders for ________________ a) all dealers of all branches b) all clients of his branch c) own user Id d) all dealers of his branch 178. ________________ is an order that has been entered by user but which has not been completely traded or cancelled. a) pending order b) outstanding order c) cancelled order d) executed order 179. Which of the following is not a special feature of MBP in NEAT system? a) Regular lot & special terms orders can be viewed in MBP. b) Only orders for best 5 prices can be viewed in MBP c) The status of security, be it in pre-open phase or suspended is indicated in MBP screen d) Untriggered stop loss order will be displayed in MBP screen. 180. Which of the following screen gives the snap shot for a particular security, for time intervals parameterised by the exchange? a) Market statistics b) Market watch c) Activity log d) Market movement 181. Which of the following symbol in Activity Log is associated with sell order to indicate a match? a) B b) S c) M d) O 182. In Auction Inquiry, the symbol _______ displayed to denote Auction is over. a) S b) M c) F d) X 183. No delivery period for a security is displayed in ____________ option. a) security information b) security descriptor c) security analysis d) security window

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184. Which of the following is FALSE about corporate action indicator in Market watch screen of NEAT system? a) XD is displayed for a security, which goes ex-dividend. b) Ex indicator appears till the end of no delivery period in which security goes ex-benefit. c) C* appears for a security with cum rights d) If a security goes ex-benefit without having no delivery period period, ex indicator is displayed only on ex date. 185. Which of the following window in NEAT, is used to view the trade details of a dealer? a) Trade inquiry b) Market inquiry c) Market trades d) Previous trades 186. Which of the following option is used to set up order value limit for a user? a) User order value limit b) Branch order value limit c) Order value limit d) User order limit 187. Any order below or above 20% over the base price of securities included in indices comes to the exchange as ____________ a) Price freeze b) Quantity freeze c) Order freeze d) Trade freeze 188. S&P CNX Defty consists of _____________. a) 50 securities expressed in Rupees b) 50 securities expressed in Dollars c) 50 securities expressed in Pounds d) 50 securities 189. Which are the following is CORRECT about order limits option in NEAT system/ a) It is used to specify maximum value per order and maximum quantity per order that can be entered in NEAT. b) It is used as a safety measure against any error during data entry of orders. c) Unlimited can be set in Order quantity field. d) All of the above. 190. The best buy price, best sell price, last traded price etc. of a security are displayed in ___ a) Market watch b) Market Inquiry c) Market By Price

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d)

Inquiry window

191. Which of the following is/are the features of Temporary Sign-Off option in logoff application? A This feature allows the users to disallow the use of trading software without logging off B It is automatically activated when the user is inactive for 5 minutes. C During temporary sign-off, the application continues to receive all market updates. a) b) c) d) only A & B only B & C A, B & C Only C

192. In Market Inquiry window, the symbol P indicates that the security is ____________. a) Suspended b) Permitted to trade c) in pre-open phase d) in opening phase 193. Which of the following screen displays information of NSE indices and their 52 weeks high, 52 weeks low, up moves, down moves & market capitalization? a) Market Index Broadcast b) Multiple Index Broadcast & Graph c) Market Index window d) Market Movement window. 194. The book in which limit orders are stored and all market orders are crossed against the limit orders sitting in that book and is visible to all market participants is _________ a) OECLOB b) OECLB c) OEELOB d) Order book 195. The purpose of _____________ is to provide with facility of buying & selling securities that comprised the index. a) Basket Trading b) Buy Back trades c) Index trading d) Market watch 196. Which of the following combination of orders is valid? a) DQ & AON b) IOC & DAY c) SL & MF d) GTC & GTD

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197. Orders for which price is determined by the system is called as _____________ a) limit order b) market order c) system order d) special order 198. Closing prices of securities traded on a day can be had from ___________ a) Online Back-up b) Security Information c) Reports d) Bhav Copy 199. Which of the following is/are TRUE about trade confirmations slips generated in NEAT? a) Trade confirmation slip is generated when a trade takes place b) Trade confirmation slip gets printed with a unique trade number c) Neat system broadcasts a message to entire market displaying the details of trade. d) All of the above 200. An order, which is cancelled automatically during the day, is called as _________. a) Limit order b) Market order c) Day order d) GTC order 201. How many depositories are there in India? a) 2 b) 3 c) 4 d) None of the above 202. What do you mean by NSDL? a) National Securities Depository Limited b) NSEs Security Depository Limited c) National Stock Depository Limited d) National Securities Depositories Limited 203. Which of the following statement(s) is/are TRUE about dematerialisation of shares? Statement I - NSDL provides electronic transfer of securities Statement II - More than 99% of turnover is settled in demat form. Statement III - All actively traded scrips are held, traded & settled in demat form. a) Only B & C

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b) c) d)

Only A & C Only A & B A, B & C

204. _____________determines the funds/securities obligations of the trading members and ensures that trading members meet their obligations. a) Stock Exchange b) NSE c) NSDL d) NSCCL 205. Which of the following is NOT CORRECT about NSCCL & its functioning? a) NSCCL provides platform for its trading members. b) NSCCL is responsible for post trade activities of Stock exchange. c) Clearing & Settlement of trades & Risk management are its central activities d) It determines obligations of members and collects & maintains margins, base capital and other funds 206. ______________ are responsible for clearing & settling the trades of his associate trading members & institutional clients. a) Clearing Members b) Professional Clearing Members c) Custodians d) Trading Members 207. Which of the following is FALSE about depositories and its role in settlement of trades? a) Depositories help in settlement of dematerialised securities. b) Every trading member is required to maintain a clearing pool account with the depositories. c) Every Clearing member is required to make available the required securities in the designated account on settlement day d) The depository runs an electronic file to transfer the securities from accounts of CM to that of NSCCL. 208. Every Clearing Member is required to open a dedicated clearing account with _________ of the clearing banks. a) 1 b) 2 c) 3 d) None 209. Rolling settlement was introduced in India by __________ a) NSE b) BSE c) OTCEI d) HSE

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210. Which of the following banks is empanelled in the list of Clearing Banks by NSCCL? a) State Bank of India b) Punjab National Bank c) Bank of India d) Syndicate Bank.

211. Under T+2 rolling settlement, Pay-in & Pay-out takes place on _____________ a) same day b) trade + 2th day c) trade + 2th working day d) none of the above 212. The clearing member pools all his client deliveries in __________ account before making a delivery to NSCCL. a) Pool b) Delivery c) Receipts d) Beneficiary 213. NSCCL gives pay-out to the clearing member in _________ account from where it is transferred to the pool account of Clearing members? a) Pool b) Delivery c) Receipts d) Beneficiary 214. Which of the following account is used by Clearing Members to deliver securities to NSCCL? a) Pool c) Delivery b) Receipts d) Beneficiary 215. Base Minimum Capital (BMC) requirement is utilised towards ______________ a) exposure / turnover b) margin payment c) both a & b d) either a & b 216. Additional Base Capital (ABC) is utilised towards ___________ a) exposure / turnover c) margin payment b) both a & b d) either a & b

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217. Gross Intra Day turnover (Buy + Sell) of a member shall not exceed ________ times of capital available with NSCCL. a) 33.32 b) 33.33 c) 33.34 d) 33.35 218. Which of the following options is/are correct about exposure limit violations by members? a) Members exceeding the gross exposure limit are not permitted to trade with immediate effect. b) Members shall bring in additional base capital resulting in enhanced gross exposure limit c) Penalty of Rs.5000 is levied for each violation of gross exposure limit and the penalty amount can be paid any day d) Only a & b 219. Early pay-in of securities / funds will help in members in ______________. a) computation of margin payable b) re-computation of margin payable c) margin payable d) gross exposure available 220. In order to migrate membership from individual to corporate, the individual should hold at least ___% of the paid-up capital of the proposed corporate (listed company). (a) 38 (b) 39 (c) 51 (d) 42

221. Which of the following is NOT an objective of Securities and Exchange Board of India? (a) Permitting companies to issue securities (b) Protecting the interests of investors in securities (c) Promoting the development of the securities market (d) Regulating the securities market

222. Which of the following statement is TRUE about auction in the NEAT system? (A) Order matching takes place at the end of the solicitor period for the auction. (B) Order matching takes place for the orders received during solicitor period only.
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(C) All auction trades take place at the auction price that is calculated as per regular

(a) (A) and (C) only (b) (B) and (C) only (c) (B) only (d) (A), (B) and (C) 223. SEBI has permitted __ to allot ISIN for demat shares. (a) NSDL (b) NSE (c) BSE (d) NSCCL

224. An individual applying for the sub-brokership in NSE should ___ years of age. (a) not be less than 19 (b) not be less than 20 (c) not be less than 21 (d) not be less than 22

225. What is a market lot for depository securities (series - E) in the NEAT system? (a) 1 (b) 2 (c) 3 (d) no limit

226. Which of the following statements are true? Statement A: Base Minimum Capital can exposure/turnover.

be

utilised

towards

taking

Statement B: Base Minimum Capital can be utilised towards margin payment. (a) Statement A only

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(b) Statement B only (c) Both the statements (d) Neither of the statements

227. Which of the following is NOT true about issue of securities? (a) Issuers are required to comply with Disclosure and Investor Protection guidelines and then access the market. (b) The Disclosure and Investor guidelines contain a substantial body of requirements for issuers/intermediaries, the broad intention being to ensure that all concerned observe high standards of integrity and fair dealing. (c) The Disclosure and Investor Protection guidelines aim to secure fuller disclosure of relevant information about the issuer and the nature of the securities to be issued so that investor can take an informed decision. (d) The issue price of shares is determined by merchant banker in consultation with SEBI.

228. In the event of the user forgetting his password on the NEAT system, the trading member is required to _____. (a) login with a password of another user of the same trading member (b) inform the Exchange in writing to reset the password (c) reset the password and inform the exchange (d) login with the default password and enter a new password

229. Which of the following statement(s) is TRUE: (A) A stockbroker can trade singly or in concert with others to create a market in a scrip or a group of scrips. (B) A stockbroker shall not deal knowingly, directly or indirectly, with a client who defaults to another stockbroker (a) Statement A (b) Statement B (c) Both the statements (d) Neither of the statements

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230. Which time condition is NOT available along with Disclosed quantity during order entry on the NEAT system? (a) Good till Cancelled (b) Day (c) IOC (d) Good till Days

231. A client shall make payment for securities purchased to the trading member . (a) on receipt of the securities (b) within 48 hours of sale (c) within 24 hours of sale (d) before the funds pay-in day

232. In case the user logs in for the first time, a valid combination of______ needs to be entered compulsorily to gain access to the NEAT system (a) Trading Member ID and Default Password (b) User ID, Trading Member ID, Default Password and New Password (c) User ID, Trading Member ID and Default Password (d) User ID and Default Password

233. IPF stands for_____. (a) Indian Peace-keeping Force (b) Investor Protection Fund (c) Indian Protection Fund (d) International Protection Fund

234. Which of the following is NOT a requirement for an individual to become a sub-broker? (a) Pass in NCFM examination. (b) 21years of age. (c) not convicted of an offence in fraud.

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(d) fit and proper person.

235. Trading Member shall issue the contract note for purchase or sale of securities to a client within _____of the execution of trade (a) 12 hours (b) 24 hours (c) 36 hours (d) 48 hours

236. In arbitration, arbitrator(s) is/are appointed by_______ . (a) SEBI (b) the Central Government (c) the disputants (d) the exchange 237. Which is the leading stock exchange in India? (a) Delhi Stock Exchange (b) National Stock Exchange of India (c) OTCEI (d) Calcutta Stock Exchange

238. What is the purpose of 'Order Limit' facility in the NEAT system? (a) It enables the branch manager to setup a limit on order entry for himself and for all dealers under the trading member firm. (b) There is no such facility as 'Order Limit' in the NEAT system. (c) It enables individual users to specify maximum value per order and maximum quantity per order that can be entered from the trader workstation. (d) It enables corporate manager to setup order limit for all dealers under the trading member firm.

239. Which of the following is FALSE about order modification in the NEAT system? (a) MF orders cannot be modified to a MF quantity greater than the order quantity. (b) If the order has a D condition attached, then the user can modify the MF
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quantity to a value greater than D. (c) If MF/AON condition is not allowed for a security, then the user cannot modify orders in that security so as to attach the MF/AON condition. (d) A D order with a value less than one Regular Lot or a value other than multiples of Regular Lot is not permitted.

240. A person can become a member of ______ recognised Stock Exchanges. (a) any number of (b) only one (c) only two (d) only three

241. Which of the following is NOT an objective of the establishment of NSCCL? (a) To operate a tight risk containment system. (b) To settle securities in demat form. (c) To promote and maintain short and consistent settlement cycles. (d) To provide counter-party risk guarantee.

242. In respect of demat securities, who is entitled to rights and obligations? (a) Beneficial owner (b) Custodian (c) Depository participant (d) Registered owner

243. Which of the following is NOT covered under the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations 1995? (a) Unfair trade practice relating to securities (b) Market manipulation (c) Insider-trading (d) Misleading statements to induce sale or purchase of securities

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244. Which of the following is FALSE about trade management in the NEAT system? a) The trade confirmation slip gets printed at the trader workstation of the user with a Unique trade number. (b) The user cannot reprint his trade confirmation slip. (c) Whenever a trade takes place, the system sends a trade confirmation message to the users involved in the trade. d) Matching of two orders is done automatically by the system. 245. Which Act provides for direct and indirect control of virtually all aspects of securities trading and running of stock exchanges? (a) The Banking Regulation Act, 1949. (b) The Securities Contracts (Regulation) Act, 1956. (c) The Capital Issues (Control) Act, 1947. (d) The Companies Act, 1956. 246. Which report displays information regarding the Open, High, Low, Close, Previous Close and % change over the Previous Close of S&P CNX Nifty index and CNX Nifty Junior index? (a) Market Statistics report (b) Activity Log report (c) Open Orders report (d) Trades Done Today report 247. x.25 address check is performed in the NEAT system. When the user (A) logs in to the NEAT system only (B) request for report download only [C] logs in for the first time in NEAT system only (D) logs into the NEAT system and during report download request. (a) (B) only (b) (A), (B) and (C) (c) (D) only (d) (B) and (C) only 248. Which of the following information is NOT displayed in 'Security Descriptor' on the NEAT system?
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(a) Tick size (b) Best Buy and Sell orders (c) Full name of the security (d) The price range of the security for the day 249. The powers under the Securities Contracts (Regulation) Act, 1956 are NOT shared by _______. (a) Department of Economic Affairs (b) Department of Company Affairs (c) Securities Exchange Board of India (d) Reserve Bank of India

250. In which book type, does the user enter Auction orders? (a) RL (b) SL (c) AU (d) OL 251. The advertisement in any publication/media by a trading member of NSE shall contain __. (A) Name and/or his logo (B) Code of NSE membership (C) Registration no. allotted by SEBI (a) (A) and (C) only (b) (B) and (C) only (c) (A), (B) and (C) (d) (C) only 252. A Company does NOT announce a record date for ______. (a) Holding general meeting (b) Declaring dividends (c) Rights issue (d) Bonus issue 253. What does 'OM' indicate as an activity in the 'Activity Log' screen in the NEAT

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system? (a) Order modified (b) Order cancelled (c) Trade modified (d) Trade cancelled

254. Which is the underlying asset for index futures traded on NSE? (a) S&P CNX Defty (b) CNX Midcap 200 (c) CNX Nifty Junior (d) S&P CNX Nifty 255. The Daily Funds Statement generated from clearing software does NOT display ______. (a) Summary Transaction Number (b) Original amount (c) Due date and due amount (d) Details of the clients

256. Which of the following activities the user can carry out during Open phase in the normal market on the NEAT system? a) Inquiry of different screens only b) Order entry, Order modification and Order cancellation only c) Both of the above d) None of the above 257. Orders, in the Outstanding Orders screen in the NEAT system, are displayed _______. a) On the basis of price / time priority in order of Regular Lot orders first and then Stop Loss orders b) On the basis of time priority c) In descending order of order numbers d) In ascending order of order numbers 258. Order entry can be carried out in RETDEBT market by selecting______ in the book type. a) BT b) RD c) RL d) SL
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259. Which of the following is true about trade cancellation in the NEAT system? a) The user can use trade cancellation screen for canceling trades done during the day b) The user can request for trade cancellation from the previous trades screen. c) The counter party to the trade makes similar request on the same trading day. d) All of the above. 260. Which of the following is FALSE about auctions in the NEAT system a) Auctions are initiated by the Exchange on behalf of trading members for settlement related reasons. b) If the exchange conducts a Buy-In auction, the trading members enter sell orders as solicitor orders c) If the exchange conducts a Sell-In auction, the trading members enter buy orders as solicitor orders d) The trading members can participate in the exchange-initiated auction by entering orders as a competitor. 261. What is true about Internet trades on NSEIL? a) NSEIL enables investors to place orders on the NEAT system directly through the Internet. b) NSEIL enables investors to use the internet as an order routing system c) NSEIL enables brokers to collect orders through the Internet from clients. d) NSEIL uses Internet in lieu of VSATs for trades in NEAT system. 262. In Limited Physical Market, orders get matched when _____ in the buy and sell order. a) Only price is same b) Price and quantity is same c) Only quantity is same d) Stop loss is specified as order condition. 263. Which of the following statement is TRUE? a) Clearing members are responsible for settling their obligations as determined by NSCCL b) Custodian can be a trading member c) Clearing members are not required to open a dedicated clearing account with any of the clearing banks. d) Clearing members are not required to maintain a clearing pool account with depositories 264. Which of the following is true about rolling settlement?

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a) b) c) d)

In T+X rolling settlement, T is the trade day and X is the number of business days after trade date on which settlement takes place. NSE does not provide an option to settle trades in demat securities on rolling basis For arriving at the settlement day, all intervening holidays such as bank holiday are included None of the above statements are true

265. Which of the following is true about settlement for the Limited Physical Market segment? a) Delivery of shares in street name and market delivery is treated as good delivery. b) Any delivery less than 500 shares is marked as short and such deliveries are compulsorily closed out. c) Settlement for trades is carried out on a trade for trade basis. d) Securities and funds pay in takes place on T-+1 working days after the trade date. 266. Penalty points are charged to members for _____________. a) only for gross exposure & turnover violations b) only for violation in respect of client code modifications c) only for violation I respect of non-confirmation of custodial trades d) all of the above 267. VAR margin is charged at differential rate on the _______ position of the client. a) Net outstanding sale b) Gross outstanding sale c) Net sale d) Gross sale. 268. Members can submit which of the following as additional base capital to NSCCL. a) Cash b) Fixed Deposit Receipts c) Bank Guarantee d) All of the above. 269. Which of the following statements is true about arbitration? a) b) c) d) The reference for arbitration should be filed within 6 months from the date when dispute arose between the parties along with the list of arbitrators. The arbitration application received form the applicant is forwarded to the respondent The respondent is called upon to file his reply along with his list of arbitrators within the specified time All of the above statements are true

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270. Which of the following documents / information do the trading members of NSE have to submit on an annual basis as part of the continuing membership norms? a) Audited financial statements. b) Networth certificate in the prescribed format duly certified by a chartered accountant c) Details of directors, shareholders, dominant shareholders, etc. duly certified by a chartered accountant d) All of the above. 271. SEBI made it mandatory for all brokers to use _____________ for all clients. a) b) c) d) Permanent Account number Driving License number Bank Account number Unique client code

272. As per the provisions of SEBI (Prohibition of Insider Trading) Regulations, any person who holds more than _____ shares or voting rights in any listed company shall make such disclosure to the company. a) 6% b) 5% c) 4% d) 3% 273. The minimum paid-capital of private company is Rs._____________. a) 3 lakhs b) 4 lakhs c) 1 lakh d) 2 lakhs 274. The minimum paid-capital of public company is Rs._____________. a) 6 lakhs b) 5 lakhs c) 4 lakh d) 3 lakhs 275. The private company limits the number of its member to ____________. a) seven b) two c) fifty d) No limit 276. The public company limits the number of its member to ____________. a) six b) three c) seven

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d)

No limit

277. The minimum number of persons required to form a private company is ________. a) two b) three c) four d) seven 278. The minimum number of persons required to form a public company is ________. a) four b) five c) six d) seven 279. Every public company, making initial public offer of any security for a sum of rupees of ________ or more, shall issue the same only in dematerlised form. a) three crores b) fifty crores c) ten crores d) nine crores 280. What is the difference between listed and permitted shares? a) Listed shares belong to public companies while permitted shares belong to private Cos. b) Shares of companies which have entered into a listing agreement with an exchange are called listed, while shares permitted for trading without entering into a listing agreement are called permitted shares. c) Listed shares are regulated by SEBI while permitted shares by Exchange. d) There is no difference. 281. As per _________________, a contract is an agreement enforceable by the law. a) Indian Contract Act 1872 b) SEBI Act 1992 c) SCRA Act 1956 d) Companies Act 1956 282. A certificate under the common seal of a company, specifying the number of shares held and is prima facie evidence of the title to such shares is called as ____________. a) Share Certificate b) Certificate of Shares c) Shares d) All of the above

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283. A general meeting of a company may be called by giving at least __________ days of notice in writing. a) 19 b) 20 c) 21 d) 22 284. The Investor Education & Protection Fund which is utilised for promotion of awareness amongst the investors and for the protection of interest of investors is credited with following except, a) amounts in the unpaid dividend accounts b) application money received for allotment of any security c) matured deposits & interest accrued on the amounts on dividends & debentures. d) contribution made by the Stock Brokers 285. Which of the following entity is entitled for the Rights Issue in respect of securities held by a Depository? a) Registered Owner b) Beneficial Owner c) Actual Owner d) Depository Participant 286. Every Sub-Broker shall pay the registration fees of Rs._______ for first five years and Rs._______ as long as the certificate remains in force. a) 5,000 & 1,000 b) 1,000 & 500 c) 1,000 & Nil d) 5,000 & Nil 287. A penalty of cancellation of registration of a stock broker may be imposed if, I The Stock-Broker violates any provisions of Insider Trading or Takeover regulations II. III a) b) The Stock-Broker found guilty of fraud or is convicted of a criminal offence Stock exchange cancels the membership of the Stock-Broker. Only I& II Only III c) Only II & III d) I, II & III

288. A Stock-broker or sub-broker shall not buy, sell and deal in securities, unless he holds the certificate granted by _____________ a) RBI b) SEBI c) NSCCL d) All of the above

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289. A Broker is a person who arranges to buy and sell securities on behalf of _____________. a) Different exchanges b) Buyer & Seller c) Purchaser & Exchange d) Seller & Exchange 290. Persons or Institutions desirous of securing admission as Trading Members can apply for any for the following segment groups except, a) Wholesale Debt Market b) Capital Market & Wholesale Debt Market c) Capital Market & Futures and Options d) Wholesale Debt Market & Futures and Options 291. Which of the following is/are taken into consideration by SEBI for granting registration to a Stock-Broker? a) He is eligible to be admitted as Stock-Broker & has the necessary infrastructure. b) Has any past experience in the business of securities c) He is being subject to disciplinary proceeding under the rules, regulations & bye-laws of stock exchange. d) All of the above 292. Which of the following is/are TRUE in regarding, not admitting a person as a TM? a) He has not been adjudged bankrupt or a receiver of order in bankruptcy b) He has been convicted of a criminal offence c) He has not compounded with his creditors. d) a&c e) only b 293. A Corporate entity shall have, not less than 2 directors as a qualified directors who shall be, a) atleast graduates b) atleast graduates & have 1 of year of experience in securities market. c) atleast graduates & have 2 of years of experience in securities market d) atleast graduates with NCFM qualification 294. Minimum paid-up capital & Networth required for an entity to apply for membership in CM and F&O segments is _____________. a) 30 Lakhs & 100 Lakhs b) 40 Lakhs & 100 Lakhs c) 50 Lakhs & 100 Lakhs d) 60 Lakhs & 100 Lakhs

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295. If an Individual member upgrades himself to Corporate Membership, then he should hold at least _________ of the paid up capital of the proposed corporate. a) 49% b) 50% c) 51% d) 52% 296. Dominant Promoter group is a group of shareholders of the corporate trading member, who normally would be individuals not exceeding ___ numbers and would jointly and/or severally hold not less than ______ of shares or _____ in case of listed companies. a) 4, 40%, 51% b) 4, 51%, 40% c) 3, 51%, 50% d) 4, 50%, 40% 297. What is the lock-in period of deposits made by the Trading member, who applied for surrender of Trading Membership? a) 10 months b) 11 months c) 12 months d) 13 months 298. Which of the following punishment(s) is/are imposed on failing to provide Margin deposits and / or deposits to meet Capital Adequacy Norms? a) Expulsion b) Suspension of Business c) Fine d) Expulsion and Fine 299. A sub-broker is a person who intermediates between _____________ & ____________. a) Investors & Investors b) Investors & Broker c) Investors & Exchange d) Broker & Exchange 300. What is the percentage of amount to be collected form clients as upfront margin, if the margin in respect of the client in the settlement works out to be more than 5 Lakhs? a) 5% b) 10% c) 15% d) 20% 301. Which of the following is FALSE in regarding the contract notes issued by Trading Members? a) Contract Notes must be issued within 24 hours of the execution of orders

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b) c) d) e)

Contract Note must contain the details of trade such as trade number, order no, trade time, security name, quantity, brokerage, settlement no & details of other levies. Contract Note must be duly signed by TM or his authorised signatory Contract Note must be in prescribed format & stamp duty is paid. None of the above

302. The Contract Note should contain name, ___________________ and SEBI registration number of Trading Member. a) Registered Office Address b) Dealing Office Address c) Registered Office Address as well as Dealing Office Address d) Registered Office Address and / or Dealing Office Address 303. Every Trading Member shall make payments to his clients or deliver securities purchased within ______________ of pay-out. a) T+2 days c) 2 working days b) 24 hours d) 48 hours 304. What is the maximum brokerage chargeable by TM in respect of trades executed in the securities on Capital Market segment? a) 1.0% c) 1.5% b) 2.0% d) 2.5% 305. Which of the following is NOT TRUE in relating to brokerage charged by TM? a) Maximum brokerage is inclusive of brokerage charged by sub-broker. b) Brokerage shall be charged and indicated separately from the price c) TM may share brokerage with a person who is a TM or in employment of another TM. d) Maximum brokerage is exclusive of statutory levies. 306. The Sub-broker shall make payments to his clients or deliver securities purchased within ____ of pay-out a) 24 hours c) 48 hours b) 2 working days d) T+2 days 307. What is the maximum brokerage (in percentage terms) that can be charged by a sub-broker from his client? (a) 1.5 % (b) 2.5 % (c) The percentage is based on the total turnover of the client and is negotiable (d) No specific limit is prescribed

308. Purchase / Sale note is issued by _____________. a) Stock-Broker c) Sub-Broker b) Either a & c d) Both a & c

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309. Investors complaints against the Trading Member in respect of claims / disputes for transactions on NSE are handled by ________________. a) Investor Grievance Cell c) Grievance Cell b) Complaints Cell d) Investor Complaints Cell 310. Minimum Number of bank accounts for client funds to be maintained separately are ______ a) 1 c) 2 b) 3 d) No limit 311. The reference for arbitration shall be filed within ___ months from the date of dispute arose between the parties. a) 3 c) 4 b) 5 d) 6

312. Which of the following is/are CORRECT about agreement executed as a part of Broker-Client Relation? a) TM shall enter into agreement in the specified format b) The said agreement shall be executed on non-judicial stamp paper of adequate value c) The agreement shall duly signed by the both parties and the copy of such shall be with TM d) All of the above 313. The respondent is called upon to file his reply with his list of arbitrators within _________ a) 15 days c) 30 days b) 45 days d) None of the above 314. _________number of arbitrators appointed for the claim amount less than 25 Lakhs and ____ for the claim amount is more than 25 Lakhs. a) 1, 3 c) 2, 4 b) 3, 5 d) 4, 6 315. The arbitration fees is borne by ___________ a) Aggrieved party b) As decided by arbitration panel

c) Respondent d) Equally

316. An arbitration award is enforceable under/by ____________ a) Central Government c) SEBI b) Code of Civil Procedure SEBI Act 1992 d) RBI 317. Which of the following, shall a TM obtain prior approval for issuing advertisements in the media and to comply with code of Advertisement?

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a) b)

Exchange SEBI & Exchange

c) RBI d) SEBI

318. Which of the following not falls under code of conduct of SEBI regulation 1992? a) Execution of orders b) Breach of Trust c) Issuance of Contract Notes d) Fairness to Clients 319. Which of the following statement(s) is/are true in relation to complying with code of Advertisement prescribed by the Exchange? a) TM should designate a person to ensure the correctness of the information given in any advertisement. b) The Advertisement should not contain any confusing, misleading or offensive information The advertisement should be free form inaccuracies & contain name and code of NSE membership c) The copy of such advertisement should be retained for 1 year. 320. Which of the following conditions are to be fulfilled by the TM for getting permission for surrendering the membership? a) Clearing off all the dues to the exchange and obtaining no due certificate from SEBI b) Notifying all other TMs of the approval of surrender c) Issuance of advertisement in two leading dailies d) All of the above 321. A clause must be mentioned in every contract note: (a) Client will hold the security blank at the trading member's risk (b) Client will not hold the security blank at the trading member's risk (c) Client will hold the security blank at its own risk (d) Client will not hold the security blank at its own risk 322. Which of the following is not currently available in Normal market? a) Pre-Open phase b) Opening phase c) Open phase d) Market Close 323. Which of the following is CORRECT about SURCON period? a) It is a Surveillance & Control period after market close. b) It is the period during which users have inquiry access only. c) It is the period during which system processes the data for making system available for the next Trading day. d) All of the above e) None of the above 324. Which of the following is the top most level in hierarchy? a) Corporate Manager b) Branch Manager

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c) Dealer d) User 325. Which of the following is lowest level in hierarchy? a) Corporate Manager b) Branch Manager c) Dealer d) User 326. The NEAT system supports an order driven market, wherein order match on the basis of ___. a) time priority b) price priority c) time price priority d) price time priority 327. What do you mean by abbreviation of word NEAT? a) National Exchange for Automated Trading b) National stock Exchanges Automated Trading. c) Both a& b d) None of the above 328. Which of the following is NOT TRUE about Corporate Manager? a) Corporate Manager receives the End of day reports for all branches b) Corporate Manager can set Branch Order Value limits for all branches c) Corporate Manager can set Order Value limits for the dealers of his hierarchy can modify orders for his all branches & dealers. d) None of the above 329. Which of the following is CORRECT about Branch Manager? a) Branch manager can view orders of all users of his branch. b) Branch manager can set up order limits for a dealer of his branch c) Branch Manager is placed under Corporate Manger. d) Only a & b e) a, b & c 330. Which of the following order & trade related activities is NOT available to a Dealer? a) Can view order & trade related activities of oneself. b) Can perform order & trade related activities of oneself. c) Cannot have access to information of the dealers under the same branch d) Can set order value limits for oneself. 331. A trading member shall be deemed guilty of misconduct if he fails to ____ a) Provide buy and sell recommendation to clients b) Utilize clients funds as his own funds c) Give preference to his own orders to that of his clients d) Submit to or abide by arbitration 332. Member wise margin payment status report is a ____

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a) weekly report b) Monthly report

c) Daily report d) none of the above

333. The primary market issuance is done either through public issues or ____ a) Secondary Markets c) FII placements b) HNI Placements d) Private placement

334. Which of the following issue securities in the primary market? a) Government of India b) State Governments c) Companies d) All of the above

335. ______ is printed on the contract note issued by the trading member to the client? a) user ID C) Terminal Id b) Name of the dealer who executed the trade d) Settlement Number

336. the following intermediaries and persons associated with securities market shall buy, sell or deal insecurities after obtaining a certificate of registration form SEBI, as required by section 12. a) stock Broker b) Merchant banker c) Portfolio manager d) all of the above

Mr. X places a Buy Order of 2000 shares of GRASIM @Rs 1200 per share at 12.31PM. Mr Z places a sell order of 1000 shares of GRASIM @Rs 1198 per share at 12.35PM. Assume that no orders were available at the tme. At what price the trade will take place ? a) b) c) d) 1000 shares of GRASIM will get trade at Rs 1198 2000 shares of GRASIM will get trade at Rs 1200 1000 shares of GRASIM will get trade at Rs 1200 None of the above

Mr X place a sell order for 1000 shares of GRASIM @Rs 1250 per share at 13.20pm. Mr Z places a buy order of 2000 shares for 1255 per share at 13.25pm. Assume no order were available at that time. At what price the trade will take place ?

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a) b) c) d)

2000 shares of GRASIM @Rs 1250 per share 1000 shares of GRASIM @Rs 1255 per share 1000 shares of GRASIM @Rs 1250 per share 2000 shares of GRASIM @Rs 1255 per share

Auction is held in SATYAM of 2000 shares. The closing price of SATYAM at that day was Rs 600, the last traded price on that day was Rs 615 and the price on last trading day was 650. The price band applicable for SATYAM in 20%. What is the maximum price allowable to put a sell order ? a) b) c) d) 650 480 780 738 Previous day closing price = 650 Priceband = 20% Allowable price = previous day closing price X Priceband = 650 X 20% = 650 X (1+20/100) = 650 X (1+ 0.20) = 650 X(1.2) = 780

Auction is held in ACC or 20,000 shares. The closing price of ACC on that day was Rs 160. The last traded price of ACC on that day was Rs 165. The closing price of ACC last Friday was Rs 170. The previous day closing price of ACC was Rs 180. What is the maximum allowable price at which the member can put a sell order in the auction for ACC (price band +/-15%) a) b) c) d) 180 170 207 195

Previous day closing price=180 Price band=15% Allowable price=180 X 15%

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=180 X ( 1+15/100) = 180 X (1 +0.15) =180 X 1.5 =207

What is the maximum brokerage chargeable by broker for the following transactions ? Bought 2000 shares of scrip X @Rs 150. Sold 1000 shares of scrip X @Rs 160. a) b) c) d) 11500 7900 8910 5900

Trading Member/Broker/Stock Broker/Maximum Brokerage =2.5% Sub Broker Brokerage= 1.5% Note:stock broker and sub broker both are different

A Bought 2000 shares @Rs.150 A Sold 1000 shares @Rs.160

2000 X 150=300000 1000 X 160=160000 460000

Maximum Brokerage = 2.5% =460000 X 2.5% =460000 X 2.5/100 =460000 X 25/100 X 1/10 =460000 X 25/1000 =460 X 25 =11500 Note:2.5%=25/1000 Similarly 1.5%=15/1000 1 2

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Calculate the maximum brokerage charged by the trading member for the following transaction for client X Buy 1000 shares of scrip Y for Rs 500, Sell 500 shares of scrip Y for Rs 550. a) b) c) d) 20475 19375 19735 19573

Client A, Buy 1000 shares @Rs.500 Sell 500 shares@Rs.550

1000 X 500=500000 500 X 550= 275000 775000

Maximum Brokerage=2.5% = 775000 X 2.5% = 775000 X 25/1000 =775 X 25 =19375 (From 1)

If a client buys shares worth Rs 340000 and sell shares woth Rs 460000 through a sub broker, then the maximum brokerage payable to him (sub-broker) is __________ a) b) c) d) 16000 12000 18000 15000

In this problem values are directly given 340000 460000 800000 Sub Broker Brokerage=1.5% So 800000 X 1.5%

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800000 X 1.5/100 800000 X 15/100 X 1/10 800000 X 15/1000 800 X 15 12000

If a client buy 2000 shares of scrip X @Rs 200. Sold 1000 shares of scrip X @ Rs 250. What is the maximum brokerage of sub-broker ? a) b) c) d) 9750 9570 9075 9050

Client A, Buy 2000 shares @Rs.200 Sell 1000 shares@Rs.250

2000 X 200 = 400000 1000 X 250= 250000 650000

SubBroker Brokerage=1.5% =650000 X 1.5% =650000 X 15/1000 =650 X 15 = 9750 (from 2)

Gross exposure of a member shall not exceed ________ times of free base capital upto Rs 1 crore and _______ times of capital in excess of Rs 1 crore a) b) c) d) 8.5, 10 8.5, 8.5 + 10 8.5, 8.5 10, 8.5

SHANKAR Broking Company on NSE has a branch order limits of Rs 1000 lacs for it Mumbai branch Rs 800 lacs for Hyderabad branch. Mumbai branch has 2 users A & B with user limits of Rs 400 lacs & 350 lacs repectively. Hyderabad branch has 2 users X & Y with user limits of Rs 300 lacs & 200
97

lacs respectively. The member applied on new user at Mumbai branch. What is maximum user order value available for new user ? a) b) c) d) Rs 300 lacs Rs 250 lacs Rs 450 lacs Rs 200 lacs

Branch Branch order limit

Mumbai 1000

Hyderabad 800

Users User order limits

X 300

Y 200

400 350

New user under Mumbai = Branch order limit (User order limit) = 1000 (400+350) = 1000 (750) = 250

ABK CHOWDARY Broking Company on NSE has branch order limit of Rs 800 lacs for its Chennai Branch & Rs 750 lacs for Hyderabad branch. Chennai branch as 3 users A, B & C with user limits of Rs 200 lacs, Rs 250 lacs & Rs 300 lacs respectively. Hyderabad branch has 2 users P & Q with user limit of Rs 150 lacs & Rs 350 lacs respectively. The member applied for 2 new users R & S at Hyderabad branch. What is the maximum user order value available for new 2 users of R & S. a) b) c) d) for R user 125 lacs & for S user 125 lacs for R user 100 lacs & for S user 150 lacs for R user 150 lacs & for S user 100 lacs for both R & S user value limit Rs 250 lacs

Branch Branch order limit

Chennai 800

Hyderabad 750

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Users User order limits

Q R S

200 250 300

150 350 ? ?

New user under Hyderabad = Branch order limit (User order limit) = 750 (150+350) = 750 (500) = 250 for both users R and S MALLIKARJUN broking company has two branches one is Guntur branch and another one is Hyderabad branch. Guntur branch has unlimited order value limit. It has already 2 users A & B users Rs 250 lacs order & Rs 150 lacs order respectively. Hyderabad branch has Rs 700 lacs order value limit it has 2 users P & Q with Rs 300 lacs & Rs 200 lacs order value limits respectively. The member applied for new user R under Guntur branch. What is the maximum user order value available for new user ? a) c) Rs 200 lacs Rs 150 lacs b) Rs 300 lacs d) Unlimited

Branch Branch order limit

Guntur Unlimited

Hyderabad 700

Users User order limits

P 300

Q 200

250 150

In this problem branch order value is unlimted so user order limit is also unlimited

KIRAN REDDY broking company on NSE is having two branches each at Hyderabad & Kadapa with branch order value limits of Rs 800 lacs & Rs 900 lacs respectively. Hyderabad branch have 2 users A & B with user value limits of Rs 200 lacs & Rs 300 lacs respectively. Kadapa branch has 3 users P, Q & R with user value limits of Rs 250 lacs, Rs 350 lacs & Rs 300 lacs

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respectively. The member applied for new user at Kadapa branch. What is the maximum user order value available for new user ? a) b) c) d) Branch Branch order limit Rs 150 lacs Rs 250 lacs Rs 300 lacs No order limit available HYDERABAD 800 KADAPA 900

Users User order limits

A 200

B 300

Q R ?

250 350 300

New user under Hyderabad = Branch order limit (User order limit) = 900 (250+300+350) = 900 (900) = No order limit

If a member deposit Rs 180 lacs with NSCCL as base capital, then the member can avail _________ of turnover on trading day. a) b) c) d) Rs 34 Crores Rs 33 Crores Rs 16.50 Crores Rs 33.50 Crores

180 lak means 1.8c Base limit 100lak 80 180 [80/10] exposure 8.5 time 8 time [ since more than 100 lak, 10 times, i.e 80/10] 16.5

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The gross exposure at a particular point of time for a TM was Rs 1300 lacs and the TM got the message of violation of gross exposure limit what is the amount of deposit made by the member ? a) b) c) d) Rs 185 lacs Rs 145 lacs Rs 182 lacs Rs 180 lacs Base limit ? 100lak 45lak [since more than 100 lak, 10 times, i.e 450/10] 145 lak Calculate VaR margin on the positions given in the following table ?

Exposure 1300lak 850 450

Particulars Buy Sell VaR rate applicable

Scrip A 16000 86000 20%

Scrip B 90000 20000 15%

Scrip C 52000 12000 25%

a) b) c) d)

Rs 37000 Rs 34500 Rs 47000 Rs 48000

Script A =(16000 86000) X 20% 25% 70000 X 20/100 700 X 20=14000

Script B=(90000 20000) X 15%

Script C =(52000 12000) X

=70000 X 15/100 =700 X 15=10500

=40000 X 25/100 =400 X 25=10000

Add these three (no need of negtive sign) >14000+10500+10000=34500

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Calculate VaR margin on the positions given in the following table ?

Particulars Open position (Buy - Sell VaR rate applicable

Scrip A -20000 15%

Scrip B 50000 20%

Scrip C -10000 25%

a) b) c) d)

Rs 1600 Rs 15000 Rs 15500 Rs 16500

In this problem directly open position is given Script A =20000 X 15% 20000 X 15/100 200 X 15=3000 Script B=50000 X 20% =50000 X 20/100 =500 X 20=10000 Script C =10000 X 25% =10000 X 25/100 =100 X 25=2500

Add these three (no need of negtive sign) >3000+10000+2500=15500

Caluclate the value 5 years hence of a deposit of 1000 made if the interestrate is 10%(at beging of the year) Future value=presentvalue(1+r)t Present value(PV)=1000 Interest rate(r)=10% Time (t)=5

=1000(1+10%)5
=1000(1+0.10)5 =1000(1.15)5 =1000(1.61051)=1610.51

Caluclate the value 3 years hence of a deposit of 100000 made if the interestrate is 12%(at end of the year) Future value=presentvalue(1 + r) P V=100000 R=12%
t1

100000(1+12%)2 100000(1+0.12)
2

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T=3

100000(1.12)

100000(1.25440)=125440

Shankar deposit 2000 in bank of india (begining of the year).interestrate is 12% for 4 years.calculate compound interest.

1)Note :4 years Deposit at beging means Similarly, 3 years Deposit at beging means 2 years Deposit at beging means

r4 r3 r2

r1

r3 r2 r2 r1

r1

Etc.. like that 2)Note :4 years Deposit at ending means Similarly, 3 years Deposit at ending means 2 years Deposit at ending means Note: x
0

r 3 r2 r1

r0

r2 r1 r1 r0

r0

=1

Interest rate(i) =1+r =1+12%=1+12/100=1+0.12=1.12 Pv=2000, t= 4 Compound interest =Pv(1+r)t where t=1,2,3,4 For 4 years deposit at beginning so, =2000(1.12) +2000(1.12) +2000(1.12) +2000(1.12) =2000[(1.12)4+ (1.12)3+ (1.12)2+ (1.12)1 ] =2000[1.5735+1.4049+1.2544+1.12] =2000[5.3528] =10705.6
4 3 2 1

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Shankar deposit 2000 in bank of india (end of the year).interestrate is 12% for 4 years.calculate compound interest. For 4 years deposit at ending so, =2000(1.12)3+2000(1.12)2+2000(1.12)1+2000(1.12)0 =2000[(1.12)3+ (1.12)2+ (1.12)1+ (1.12)0 ] =2000[1.4049+1.2544+1.12+1] =2000[4.7793] =9558.6

(x0=1, (1.12)0=1)

Ramarao deposit 10000 in PNB bank.interestrate is 10% for 4 years.caluclate continuous compound PV=10000 R=10%=10/100=0.10 T=4 e=2.7182(constant value) =pv(e)
rxt 0.12 x 4

=10000(2.7182) =10000(2.7182)

0.40

=10000(1.491806) =14918

Shankar 2000 deposit in union bank (at begining of the year) .interest rate is 10% for 4 years. Find continuous compound interest PV=2000 R=10%=0.10 e=2.1782(it is constant values, not given in problems you have to remember) t=4

104

=PV (e)

rxt where

t=1, 2, 3, 4

For 4 years deposit at beginning =2000(2.7182)


0.10 x 4

+ 2000(2.7182) + (2.7182)

0.10 x 3

+ 2000(2.7182)
0.10 x 2

0.10 x 2

+ 2000(2.7182)
0.10 x 1

0.10 x 1

=2000[(2.7182) =2000[(2.7182)

0.10 x 4 0.40

0.10 x 3

+ (2.7182)
0.20

+ (2.7182)
0.10]

+ (2.7182)

0.30

+ (2.7182)

+ (2.7182)

=2000[1.4918 + 1.3498 + 1.2213 + 1.1051] =2000[5.168] =10336 Shankar 2000 deposit in union bank (at end of the year) .interest rate is 10% for 4 years. find continuous compound interest Pv=2000 R=10%=0.10 e=2.1782(it is constant values,not given in problems you have to remember ) t=4 =pv(e)
rxt

where t=0,1,2,3

For 4 years deposit at ending =2000(2.7182)


0.10 x 3

+ 2000(2.7182) + (2.7182)
0.20

0.10 x 2

+ 2000(2.7182)
0.10 x 1

0.10 x 1

+ 2000(2.7182)
0.10 x 0

0.10 x 0

=2000[ (2.7182) =2000[ (2.7182)

0.10 x 3

0.10 x 2

+ (2.7182)
0.10

+ (2.7182)
0

0.30

+ (2.7182)

+ (2.7182)

+ (2.7182)

=2000[ 1.3498 + 1.2213 + 1.1051 + 1] =2000[4.6762] =9352.4

(since x0=1, (2.7182)0=1)

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