n NISM Certifications
VII NISM Series VII
Medium

When an arbitration award is passed, the stock exchange has to ______ the deposit of the party against whom the award has been made.

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

Options

  1. A

    Refund

  2. Appropriate

    Correct answer

  3. C

    Pay back

Why this is the answer

The stock exchange debits (appropriates) the award amount from the security deposit of the member against whom the award has been passed and keeps it in a separate escrow account. Payment is made to the client after the appeal period expires.

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