Sample Questions

NISM-Series-6: Depository Operations Mock Tests — 5 random MCQs with answers & explanations

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These 5 questions are randomly selected (standard MCQs only, not case-based).

Q1 Which specific legislation first introduced the legal framework allowing for the nomination of shares, debentures, and fixed deposits?

  • A. Securities Contracts (Regulation) Act, 1956
  • B. The SEBI Act
  • C. The Depositories Act, 1996
  • D. The Companies (Amendment) Act, 1999 Correct Answer
Explanation:
The Companies (Amendment) Act of 1999 was the key piece of legislation that added the option for investors to nominate a person to receive their securities in case of death.

Marks: 1

Q2 Since November 2020, every off-market transfer needs:

  • A. Permission from the company's CEO
  • B. Confirmation by the client using an OTP Correct Answer
  • C. A bank guarantee
  • D. A physical signature from a judge
Explanation:
An OTP (One Time Password) sent to your phone ensures that you actually authorized the transfer and it's not a fraud.

Marks: 1

Q3 To whom should an entity submit an application if they want to become a Depository Participant?

  • A. Directly to SEBI, with just a copy to the Depository
  • B. To the Depository, who registers the DP directly
  • C. Separately to both the Depository and SEBI
  • D. To the Depository, who forwards it to SEBI after evaluation Correct Answer
Explanation:
An applicant first applies to the depository where they want membership. The depository evaluates the application and, if satisfied, sends it to SEBI for final approval within 30 days.

Marks: 1

Q4 Dematerialisation refers to the method of maintaining securities as physical paper certificates.

  • A. True
  • B. False Correct Answer
Explanation:
Dematerialisation is actually the opposite; it is the process of converting physical paper certificates into electronic or "fungible" form. In this state, securities do not have unique numbers like certificate or folio numbers.

Marks: 1

Q5 If the Karta of an HUF passes away, must the surviving family members make a joint application to the DP to appoint a new Karta?

  • A. True Correct Answer
  • B. False
Explanation:
Upon the death of the Karta, the family must jointly apply to the DP to update the account records with the name of the new Karta.

Marks: 1

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