Securities Intermediaries Compliance (Non Fund) Free Demo Test 5

Regulation 3(1) stipulates that an insider shall not allow access to any Unpublished Price Sensitive Information (UPSI) relating to a company or securities listed to any person, including other insiders. This is part of the insider trading regulations to prevent the unauthorized sharing of sensitive information.

In front running, the owner or purchaser of the block trade may engage in offsetting futures as a means of hedging against price fluctuations caused by the block transaction. Hedging is a risk management strategy used to mitigate potential losses from adverse price movements.

Bankers to an Issue are involved in activities such as accepting application monies, accepting call monies, and processing payments of dividends or interest warrants. However, the collection of securities transaction tax is not typically a function performed by Bankers to an Issue.

Maintenance margin refers to the minimum amount, calculated as a percentage of the market value of securities based on the last trading day’s closing price, that a client needs to maintain with the broker. It is a risk management measure to ensure that clients have sufficient funds to cover potential losses in their trading positions.

An investment adviser shall disclose to a prospective client all material information about itself, including its disciplinary history. This disclosure requirement is intended to provide clients with comprehensive and transparent information about the adviser’s background and any disciplinary actions that may impact the advisory relationship.

A KRA (KYC Registration Agency) applicant should have a net worth of at least Rs. 20 crore on a continuous basis. This financial requirement is set to ensure that KRAs have the necessary financial strength to fulfill their responsibilities in maintaining and managing KYC records in the securities market.

The periodic reports or other communications prepared for unit holders of a mutual fund shall not be included in a research report. This separation is maintained to prevent any potential conflict of interest and ensure transparency in the communication of information to investors. Research reports should be distinct from materials intended for existing unit holders of mutual funds.