Securities Intermediaries Compliance (Non Fund) Free Demo Test 7

The intermediary shall have the ultimate responsibility for the Know Your Customer (KYC) of its clients. This includes conducting due diligence, collecting necessary information, and ensuring compliance with KYC regulations to mitigate risks associated with financial transactions.

Trading ahead is the term used for the transaction where an intermediary with knowledge of an impending customer block order trades ahead of that order for the intermediary’s own profit. This practice is considered unethical and can be a form of front-running.

False. The depository participant is required to comply with the award of the Ombudsman passed under SEBI (Ombudsman) Regulations, 2003. Non-compliance with the Ombudsman’s award could lead to regulatory actions and penalties.

Regulation 15 of SEBI (Investment Advisers) Regulations, 2013 states that an investment adviser shall ensure to meet the client’s investment objective. This regulation emphasizes the importance of aligning the advice provided by investment advisers with the specific investment goals and objectives of their clients.

False. The banker to an issue shall not act in collusion with other intermediaries or the issuer in a manner that is detrimental to the investor. This statement emphasizes the requirement for ethical conduct and fair dealing in the issuance process, ensuring the protection of investor interests.

Depositories hold the responsibility for the collection of stamp duty on transactions by the transferor of securities. This is part of the regulatory framework to ensure proper documentation and compliance with stamp duty requirements in securities transactions.

True. A depository participant may delegate its functions to any other person with the prior approval of the depository. However, such delegation is subject to regulatory oversight and requires approval to ensure that the delegated functions are carried out effectively and in compliance with the necessary regulations.