n NISM Certifications
VII NISM Series VII
Medium

Why do stock exchange members report internal shortages to the Clearing Corporation?

Practice question from NISM Series VII Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    For squaring up

  2. B

    To avoid penalties

  3. For self-auction

    Correct answer

  4. D

    All of the above

Why this is the answer

If a selling client cannot deliver shares, the clearing corporation allows members to report internal shortages so the shares can be provided via a self-auction mechanism.

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