n NISM Certifications
VII NISM Series VII
Medium

Identify the TRUE statement with respect to the clearing process in the equity segment.

Practice question from NISM Series VII Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The Clearing Corporation determines the obligations after custodial confirmations

  2. B

    Institutions have to mandatorily settle their trades through custodians

  3. C

    The Clearing members are different for buy orders and sell orders and the Clearing Agency acts as the link between them

  4. Only A and B are true

    Correct answer

  5. E

    Only A and C are true

  6. F

    Only B and C are true

  7. ?

    All A, B and C are true

Why this is the answer

The clearing corporation determines obligations post-custodial confirmation. Institutions must settle through custodians. Buy and sell orders have different clearing members, with the Clearing Corporation linking them through multilateral netting.

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NISM Series VII Mock Test 2