Review Questions

1. Financial systems consist of banks, non-banks and ______________.

(a) Bullion Markets
(b) Financial Markets
(c) Money lenders
(d) NGOs

2. Safekeeping and record-keeping of securities are done by ___________.

(a) Custodians
(b) Venture Capital Funds
(c) Brokers
(d) Mutual Funds

3. Who amongst the following collates data on subscriptions regarding primary issuances?
(a) Banks
(b) Custodians
(c) Venture Capital Funds
(d) Registrars

4. As per the Securities Contract Regulation Act (SCRA), the term 'Security' excludes which of
the following?
(a) Shares
(b) Bonds
(c) Derivatives
(d) Bullion

24
Review Questions

1. Unhealthy practice in the Securities Markets includes which of the following?

(a) Disclosure
(b) Transparency
(c) Insider Trading
(d) Surveillance

2. Which of the following has the responsibility of administering the monetary policy in India?
(a) State Bank of India
(b) Reserve Bank of India
(c) Central Bank of India
(d) All of the above

3. Which authority was set up with the primary responsibility of promoting old age income
security by establishing, developing and regulating pension funds?
(a) Association of Mutual Funds in India
(b) Insurance and Regulatory Development Authority of India
(c) Pension Fund Regulatory and Development Authority of India
(d) Securities and Exchange Board of India

4. "The bye-laws of the stock exchanges are same across exchanges and need to be approved
by SEBI". State whether True or False.
(a) True
(b) False

65
Review Questions

1. Primarily, compliance involves _____________.

(a) Conforming to a rule, policy, standard or law

(b) Record keeping
(c) Reporting
(d) Preventing frauds

2. The SEBI (Intermediaries) Regulations, 2008, mandates the appointment of a Compliance

Officer. State whether True or False?
(a) True
(b) False

3. Critical Reporting by Compliance officers include which of the following?

(a) Money Laundering Activities

(b) Submission of Books of Accounts
(c) Sauda Book
(d) All of the above

4. As per the SEBI (Certification of Associated Persons in Securities Markets) Regulations, 2007,
a certificate is valid for a period of ______ from the date of grant of certificate or revalidation
as the case may be.
(a) 2 years
(b) 5 years
(c) 3 years
(d) 7 years

72
Review Questions

1. All of the following are the functions of SEBI under the SEBI Act, 1992, EXCEPT:
(a) Regulating the business in other securities markets but not in stock exchanges
(b) Promoting and regulating self-regulatory organisations
(c) Regulating substantial acquisition of shares and take-over of companies
(d) Prohibiting insider trading in securities

2. Can SEBI prohibit any company from issuing prospectus, any offer document, or
advertisement soliciting money from the public for the issue of securities? State Yes or No.
(a) Yes
(b) No

3. Penalty may be payable by an intermediary under the SEBI Act if it fails to:
(a) File any return or furnish any information, books or other documents within the time
specified in the regulations
(b) Maintain books of account or records
(c) Both (a) & (b)
(d) None of the above

4. Any intermediary can appeal to SAT if it has been aggrieved by any order passed by SEBI. State
whether True or False.
(a) True
(b) False

87
Review Questions

1. As per SCRR, the trading members of the stock exchanges are required to maintain the
counterfoils or duplicates of contract notes issued to clients for how many years?
(a) 3
(b) 5
(c) 2
(d) 7

2. Members of the stock exchanges are required to preserve which of the following documents
as per the SCRA?
(a) Networth certificate
(b) Books and accounts and other documents for a specific period of time
(c) Registration certificate
(d) All of the above

3. SCRA provides for a provision that a stockbroker of a recognised stock exchange can enter
into a contract in securities with another stockbroker after obtaining his consent. State
whether True or False.
(a) True
(b) False

4. Manner in which the derivatives contracts and other contracts should be dealt in the
securities market are prescribed in which of the following?
(a) Public Debt Act
(b) Depositories Act
(c) Companies Act
(d) SCRA, 1956

96
Review Questions

1. SEBI in the interest of the securities market may direct an intermediary to refund the money
or securities collected from the investors with or without interest. State whether True or
False.
(a) True
(b) False

2. If an applicant is not found to be a 'fit and proper person' can he get registration certificate
under SEBI (Intermediaries) Regulations 2008?
(a) Yes
(b) No

3. All the employees, directors etc. of the intermediary need to strictly adhere to the Code of
Conduct as prescribed in the SEBI Regulations. State Whether True or False.
(a) True
(b) False

4. Can a common order be passed in respect of a number of noticees where the subject matter
in question is substantially the same or similar in nature?
(a) Yes
(b) No

107
Review Questions

1. When the trading window is open, trading by designated persons shall be subject to
preclearance by the compliance officer, if the value of the proposed trades is above such
thresholds as the board of directors may stipulate. State whether True or False.
a. True
b. False

2. The objective of the SEBI (Prohibition of Insider Trading) Regulations is to prohibit insiders
from ___________ on matters relating to insider trading.
a. Dealing
b. Communicating
c. Counselling
d. All of the above

3. Organisations are required to develop practices based on _______________ basis.

a. Need to know
b. Ought to know
c. Need not know
d. May know

4. ___________ means information that is accessible to the public on a non-discriminatory

basis.
a. Generally available information
b. Price sensitive information
c. Unpublished price sensitive information
d. Non-price sensitive information

134
Review Questions

1. Fraud includes a wilful misrepresentation of truth OR concealment of material fact, in order

that another person may act, to his detriment. State whether True or False.
(a) True
(b) False

2. The SEBI Fraudulent and Unfair Trade Practices Regulations prohibit a person to, directly or
indirectly _________ securities in a fraudulent manner.
(a) Buy
(b) Sell
(c) Deal In
(d) All of the above

3. Fraud includes an intermediary providing his clients with such information relating to security
as cannot be verified by the clients before their dealing in such security. State whether True
or False.
(a) True
(b) False

4. In cases of fraud, SEBI can ___________ the registration of an intermediary.

(a) Cancel
(b) Suspend
(c) Both a & b
(d) None of the above

148
Review Questions

1. Record of transactions to be maintained under the Prevention of Money Laundering Act

includes Cash transactions of the value of more than ________.
(a) Rs.10 lakh
(b) Rs. 20 lakh
(c) Rs. 25 lakh
(d) Rs. 1 crore

2. Cash Transactions Reports (CTR) for each month should be submitted to FIU-IND by:
(a) 10th of the succeeding month
(b) 15th of the succeeding month.
(c) 20th of the succeeding month
(d) 30th of the succeeding month

3. The Suspicious Transaction Report (STR) shall be submitted within ________days of arriving
at a conclusion that any transaction, is of suspicious nature.
(a) 14
(b) 5
(c) 7
(d) 2

4. Written Anti-Money Laundering procedures need not include:

(a) Policy for acceptance of clients
(b) Procedure for identifying the clients
(c) Transaction monitoring and reporting especially Suspicious Transactions Reporting (STR
(d) None of the above

171
Review Questions

1. To effectively implement the KYC guidelines, SEBI notified the ________.

(a) SEBI (Self-Regulatory Organization) Regulations, 2004
(b) PMLA, 2002
(c) SEBI (KYC Registration Agency) Regulations, 2011
(d) None of the above

2. KRA shall have secure data transmission links with ______ that uploads the KYC documents
on its system.
(a) Other KRAs
(b) Intermediaries
(c) Exchanges
(d) Both (a) and (b)

3. Once the initial KYC of the new clients are done, the intermediary shall immediately upload
the KYC information within ________ on the system of the KRA and send the KYC.
(a) 5 working days
(b) 7 working days
(c) 10 working days
(d) 15 working days

4. KRA systems shall clearly indicate the status of clients falling under PAN exempt categories.
State whether TRUE or FALSE.
(a) True
(b) False

183
Review Questions:

1. A foreign portfolio investor shall invest only in which of the following securities?
(a) Domestic Mutual Fund Schemes
(b) Derivatives traded on a recognised stock exchange
(c) Units of Real Estate Investment Trusts
(d) All of the above

2. In respect of investments in the debt securities, the foreign portfolio investors need not
comply with any conditions or directions given by Reserve Bank of India, as long as it is
meeting the restrictions and conditions as specified by SEBI in its SEBI (FPI) Regulations. State
whether True or False.
(a) True
(b) False

3. The purchase of equity shares of each company by a single foreign portfolio investor
including its investor group shall be below ___________ per cent of the total paid-up equity
capital on a fully diluted basis of the company.
(a) 10
(b) 15
(c) 20
(d) 30

4. A Designated Depository Participant (DDP) may consider an FPI application, which has been
previously rejected by another DDP. State True or False.
(g) True
(h) False

198
Review Questions

1. Is the Stockbroker required to pre-intimate SEBI about shifting the location where it keeps its
books of account? State Yes, or No?
(a) Yes
(b) No

2. A stockbroker when dealing with a client must disclose whether it is acting as a principal
/agent. State whether True or False?
(a) True
(b) False

3. Category I and II Alternative Investment Funds shall invest what portion of the investable fund
in one Investee Company?
1) Not more than 50 per cent
2) Not more than 45 per cent
3) Maximum 10 per cent
4) Not more than 25 per cent

4. The portfolio manager shall disclose a change in the identity of the Principal Officer to the
SEBI and the clients within _______working days of effecting the change.
a) 15
b) 7
c) 10
d) 21

271
Review Questions

1. The SEBI (Merchant Banking) Regulations, 1992 provides for __________.

(a) Registration of merchant bankers
(b) General obligations of merchant bankers
(c) General responsibilities of merchant bankers
(d) All of the above

2. The applicant for merchant banker should have necessary infrastructure like _________.
(a) Office space as per SEBI criteria
(b) Equipment in place
(c) Skilled and relevant manpower
(d) All of the above

3. The applicant for merchant banker should necessarily fulfil the capital adequacy requirement
as specified in the SEBI (Merchant Bankers) Regulation. State whether True or False?
(a) True
(b) False

4. Every Banker to an Issue is required to pay a sum of Rs. ____________lakh as registration

fees at the time of the grant of certificate by SEBI.
(a) 10
(b) 20
(c) 25
(d) 30

296
Review Questions

1. Post issue activities, generally coordinated by Lead Merchant Banker, include which of the
following?
(a) Deciding on centres for holding conferences of stockbrokers, investors, etc.
(b) Processing rematerialisation requests
(c) Finalisation of the basis of allotment
(d) All of the above

2. As per SEBI (ICDR) Regulation, only audited and consolidated financial statements need to be
prepared in accordance with GAAP. State whether True or False.
(a) True
(b) False

3. As per SEBI (ICDR) Regulations, the minimum subscription to be received in an issue must be
at least _____ of the offer through the offer document.
(a) 65 per cent
(b) 75 per cent
(c) 80 per cent
(d) 90 per cent

4. As per SEBI (ICDR) Regulation, an advertisement may be issued giving any impression that the
issue has been fully subscribed or oversubscribed during the period the issue is open for
subscription, with prior intimation to SEBI. State whether true or false?
(a) True
(b) False

322
Review Questions

1. Which Act provides for the establishment of depositories in the securities market?
(a) SEBI Act
(b) Companies Act
(c) Depositories Act
(d) Securities Contracts (Regulation) Act

2. The immunity can be granted by the Central Government on the recommendation of SEBI,
under Depositories Act only if the person has made full disclosure of the violation. State
whether True or False?
(a) True
(b) False

3. An entity intending to act as a depository participant should enter into an agreement with
_________in the prescribed format.
(a) Bank
(b) Issuer
(c) Depository
(d) Broker

4. As per the Depositories Act, failure to furnish information or books or documents or reports
by the depository or the depository participant of their functioning will carry a penalty which
shall not be less than one lakh rupees but which may extend to one lakh rupees for each day
during which such failure continues subject to a maximum of ______.
(a) Rs. One Crore
(b) Rs. Two Crore
(c) Rs. Three Crore
(d) Rs. Four Crores

328
Review Questions
1. For an entity to function as a Depository Participant, it is mandatory for it to be registered
with SEBI as a Depository Participant. State True or False?
(a) True
(b) False

2. Every Depository Participant should put in place an adequate mechanism for __________ the
internal accounting controls.
(a) Reviewing
(b) Monitoring
(c) Evaluating
(d) All of the above

3. As per the SEBI (Depositories and Participants) Regulations, the records and documents
should be reconciled by the Depository Participant with each depository on a _______ basis.
(a) Daily
(b) Two-day
(c) Weekly
(d) Fortnightly

4. As per the SEBI (Depositories and Participants) Regulations, a Depository Participant shall not
increase charges / fees for the services rendered without proper advance notice to the
Beneficial Owners. State whether True or False?
(a) True
(b) False

337
Review Questions

1. Who is primarily responsible for finalising the list of persons entitled to allotment of securities
after an issuance process?
(a) Registrars to an Issue
(b) Depository
(c) Banker to an Issue
(d) Stockbroker

2. Who are known as Qualified RTA?

(a) RTA’s servicing more than 50 lakh folios
(b) RTA’s servicing more than one crore folios
(c) RTA’s servicing more than two crore folios
(d) RTA’s servicing more than 75 lakh folios

3. An RTA or any of its employees shall not render, directly or indirectly any investment advice
about any security in the publicly accessible media, whether real-time or non-realtime, unless
a disclosure of its ___________ in the said security has been made, while rendering such
advice.
(a) Interest
(b) Long or Short Position
(c) Futures Position
(d) Contracts

4. The Registrar and Share Transfer Agent shall maintain books of accounts and documents for
how many years?
(a) 3 preceding financial years
(b) 5 preceding financial years
(c) 7 preceding financial years
(d) 8 preceding financial years

349
Review Questions

1. Who is primarily responsible for making buy/sell recommendations?

(a) Research Analyst
(b) Investment Analyst
(c) Stockbroker
(d) Registrars to an issue

2. Research Analysts are required to maintain research reports/research recommendations for

a minimum period of how many years?
(a) 5 years
(b) 2 years
(c) 7 years
(d) 3 years

3. Which type of records are to be maintained by the Research Analyst or Research Entity?
(a) Client’s KYC details
(b) Risk assessment of clients
(c) Rationale for arriving at research recommendation
(d) Register of clients which the firm deals with

4. Which of the following statements is TRUE?

(a) Research Analyst has to do an annual audit in compliance with SEBI Regulations
(b) Research Analyst has to do a quarterly audit in compliance with SEBI Regulations
(c) Research Analyst has to do a six-monthly audit in compliance with SEBI Regulations

355
Review Questions

1. As per the SEBI (IA) Regulations, an 'Investment Adviser' shall not enter into transactions on
its own account which is contrary to its advice given to clients for a period of _______from
the day of such advice.
(a) Five
(b) Ten
(c) Fifteen
(d) Thirty

2. As per SEBI (Investment Advisers) Regulations, 2013, when can investment advice be given to
a client?
(a) After Risk Profiling of Client is done
(b) After Ensuring Suitability of the product
(c) After confirming the net worth of the client
(d) Both A & B above

3. Risk-profiling of a client is based on which of the following criteria?

(a) Income
(b) Age
(c) Liability/Borrowing Details
(d) All of the above options

4. Which of the following statements are true?

(a) Investment Advisers can accept fees by banking channel only
(b) Investment Advisers can accept fees by way of cash
(c) Investment Advisers can accept fees by both cash and banking channels only

370
Review Questions

1. As per SEBI (Debenture Trustees) Regulations, which of the following can apply for
registration as a Debenture Trustee?
(a) Scheduled Bank
(b) Public Finance Institution
(c) Insurance Company
(d) All of the above

2. As per the SEBI (Debenture Trustee) Regulations, the certificate of registration as Debenture
Trustee is valid ____.
(a) For 1 year
(b) For 3 years
(c) Permanently until suspended
(d) For 4 years

3. As per the SEBI (Debenture Trustees) Regulations, the debenture trustee shall communicate
to the debenture holders on _______________ basis regarding compliance, defaults, etc. and
the action taken by it.
(a) Monthly
(b) Quarterly
(c) Half-yearly
(d) Annually

4. The debenture trustee shall comply with the award of Ombudsman passed under the
Securities and Exchange Board of India (Ombudsman) Regulations, 2003. State whether True
or False.
(a) True
(b) False

383
Review Questions

1. For SEBI to consider the application of registration as a credit rating agency of an entity
promoted by a company, the promoter shall have a continuous net worth of minimum
__________ for the previous five years.
(a) Rs. 1 crore
(b) Rs. 10 crore
(c) Rs. 100 crore
(d) Rs. 1000 crore

2. As per the SEBI (Credit Rating Agencies) Regulations, the certificate of registration as a credit
rating agency is valid ________.
(a) For 1 year
(b) For 2 years
(c) Permanently until suspended
(d) For 4 years

3. What is the renewal fee to keep the registration in force as a credit rating agency?
(a) Rs. 15 lakh
(b) Rs. 50 lakh
(c) Rs. 20 lakh
(d) Rs. 25 lakh

4. A credit rating agency encouraged its client-facing employees to assure a higher rating to the
clients than the competitors. Is it a violation as per the SEBI code of conduct for credit rating
agencies?
(a) Yes
(b) No

396
Review Questions
1. A person who carries on or proposed to carry on the business of providing custodial services
is called _________________.
(a) Depository
(b) Custodian
(c) Debenture trustee
(d) Underwriter

2. The certificate of registration as custodian is valid for a period of _____as per the SEBI
(Custodian) Regulations.
(a) 1 year
(b) 2 years
(c) 3 years
(d) till suspended

3. The custodian should segregate his custodial activities from his other activities. State whether
True or False?
(a) True
(b) False

4. As per the SEBI (Custodian) Regulations, every custodian shall maintain the records and
documents for a minimum period of how many years?
(a) 3
(b) 5
(c) 7
(d) 10

403
Review Questions
1. A person who provides advice to an institutional investor in relation to exercise of their rights
in the company including recommendations on public offer or voting recommendation on agenda
items is called _________________.
(a) Custodian
(b) Proxy Advisors
(c) Investment advisor
(d) Merchant Banker

2. In case of grievance of the listed entity against SEBI registered proxy advisor, the listed entity
may approach _______
(a) SAT
(b) ROC
(c) SEBI
(d) RBI

3. Proxy Advisors shall not disclose conflict of interest on every specific document where they
are giving their advice. Is it True or False

(a) True
(b) False

4. Which of the following corporate events are evaluated by proxy advisors?

(a) Mergers and Acquisitions

(b) Senior Management Appointments
(c) CEO compensation
(d) All of these

410