NISM Series-III-A: Securities Intermediaries Compliance (Non-Fund) Practice Exam

NISM Series-III-A: Securities Intermediaries Compliance (Non-Fund) Practice Exam

The NISM Series-III-A: Securities Intermediaries Compliance (Non-Fund) Certification Examination assesses your understanding of the regulatory framework governing financial markets in India, with a specific focus on compliance requirements for non-fund based intermediaries. Earning this certification demonstrates your commitment to upholding ethical practices and ensuring adherence to regulations within the securities industry.

Who Should Take This Exam?

This NISM Series-III-A exam is ideal for individuals working or aspiring to work in compliance roles with non-fund based intermediaries, such as:

• Stock brokers (compliance officers)
• Depository participants (compliance officers)
• Merchant bankers (compliance officers)
• Underwriters (compliance officers)
• Bankers to the issue (compliance officers)
• Debenture trustees (compliance officers)
• Credit rating agencies (compliance officers)

Are There Prerequisites?

There are no formal prerequisites to take the NISM Series-III-A exam. However, a foundational understanding of the Indian financial system and securities markets is recommended for success.

Roles and Responsibilities

• Compliance Officer: Developing, implementing, and monitoring compliance programs to ensure adherence to SEBI regulations and internal policies.
• Risk Management Officer: Identifying, assessing, and mitigating risks associated with non-compliance within the organization.
• Internal Auditor: Conducting internal audits to evaluate the effectiveness of compliance controls and identify potential areas of improvement.

Exam Details 

• Duration: 120 minutes
• Questions: 100
• Passing Score: 60
• Validity: The certificate has no expiration date

Course Outline

The exam covers the following topics:

PART A – UNDERSTANDING FINANCIAL STRUCTURE IN INDIA

I. INTRODUCTION TO THE FINANCIAL SYSTEM

1. Financial System
2. Financial Markets Infrastructure Institutions (MIIs)
3. Financial Intermediaries
4. Financial Securities

II. REGULATORY FRAMEWORK – GENERAL VIEW

1. Regulatory System
2. Financial Market Regulators
3. Other Agencies in the Financial Market
4. Appellate Authority
5. Legislative Framework Governing the Financial Market
6. International Financial Services Centre (IFSC)

III. INTRODUCTION TO COMPLIANCE

1. Compliance – Introduction
2. Compliance Requirements under the SEBI (CAPSM) Regulations, 2007

IV. SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

1. Salient Features of SEBI Act, 1992

V. SECURITIES CONTRACTS (REGULATION) ACT, 1956 AND RULES, 1957

1. Securities Contracts (Regulation) Act, 1956
2. Securities Contracts (Regulation) Rules, 1957

VI. SEBI (INTERMEDIARIES) REGULATIONS, 2008

1. Introduction
2. General Obligations of Intermediaries
3. Inspection and Disciplinary Proceedings
4. Action in Case of Default and Manner of Suspension and Cancellation of Certificate
5. Code of Conduct

VII. SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015

1. Introduction to the Insider Trading Regulations
2. Code of Conduct
3. Role of Compliance Officer

VIII. SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES) REGULATIONS, 2003

1. Introduction
2. Prohibition of Fraudulent and Unfair Trade Practices
3. Investigation

IX. PREVENTION OF MONEY LAUNDERING ACT, 2002

1. Introduction
2. Highlights of PMLA, 2002
3. Highlights of SEBI Master Circular on Guidelines on AML and CFT

X. SEBI (KYC REGISTRATION AGENCY) REGULATIONS, 2011

1. Introduction
2. Registration as a KRA
3. Obligations on Surrendering Certificate of Registration
4. Functions and Obligations of KRA and Intermediary
5. Code of Conduct for KRA
6. Guidelines for Intermediaries, KRAs and In-person Verification

PART B – UNDERSTANDING INTERMEDIARY SPECIFIC REGULATIONS

XI. SEBI (FOREIGN PORTFOLIO INVESTORS) REGULATIONS, 2019

1. Eligibility Criteria of Foreign Portfolio Investors
2. Categories of Foreign Portfolio Investor
3. Application to act as a designated depository participant
4. Investment Conditions and Restrictions
5. Suspension, cancellation or surrender of certificate
6. Conditions for Issuance of Offshore Derivative Instruments
7. Code of Conduct for foreign portfolio investor

XII. SEBI (STOCK BROKERS) REGULATIONS, 1992

1. Introduction to SEBI (Stock Brokers) Regulations, 1992
2. Direct Market Access
3. Algorithmic Trading
4. Margin Trading
5. Authorised Persons
6. Permitting Underwriting activities by Stockbrokers
7. SEBI (Portfolio Managers) Regulations, 2020

XIII. SEBI (MERCHANT BANKERS) REGULATIONS 1992, ETC.

1. Introduction
2. SEBI (Merchant Bankers) Regulations, 1992
3. SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 2011
4. SEBI (Bankers to an Issue) Regulations 1994

XIV. SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS 2018

1. Applicability of ICDR Regulations
2. Initial Public Offer (IPO) and Rights Issue
3. Role as Advisors
4. Due Diligence and Compliances
5. Role as an Underwriter
6. SEBI Circular on Rights Issue
7. General Obligations of Merchant Bankers with respect to Public and Rights Issue

XV. DEPOSITORIES ACT 1996

1. Introduction
2. Rights and Obligations of Depositories
3. Enquiry and Inspection
4. Miscellaneous Issues

XVI. SEBI (DEPOSITORIES AND PARTICIPANTS) REGULATIONS 2018

1. Registration of a Depository Participant
2. Rights and Obligation
3. Action in case of Default
4. Code of Conduct for Participant

XVII. SEBI (REGISTRAR TO AN ISSUE AND SHARE TRANSFER AGENTS) REGULATIONS, 1993

1. Who is Registrar to an Issue and Share Transfer Agent?
2. General Obligations and Responsibilities
3. Code of Conduct for Registrars to an Issue and Share Transfer Agents

XVIII. SEBI (RESEARCH ANALYST) REGULATIONS, 2014

1. Introduction
2. Management of Conflict of Interest and Disclosure requirements
3. General Responsibilities
4. Maintenance of Record
5. Role of Compliance Officer

XIX. SEBI (INVESTMENT ADVISERS) REGULATIONS, 2013

1. Introduction
2. General Responsibilities
3. Risk Profiling and Suitability of Client
4. Disclosures by Investment Adviser
5. Client level segregation of advisory and distribution activities
6. Implementation of advice or execution
7. Maintenance of Record
8. Appointment of Compliance Officer
9. Code of Conduct for Investment Advisers
10. Operating guidelines of IAs in IFSC

XX. SEBI (DEBENTURE TRUSTEES) REGULATIONS, 1993

1. Registration as Debenture Trustee
2. Capital Adequacy Requirements
3. Responsibilities and Obligations of Debenture Trustees
4. Code of Conduct for the Debenture Trustees
5. Monitoring and Disclosure Requirement
6. Appointment of Compliance Officer

XXI. SEBI (CREDIT RATING AGENCIES) REGULATIONS, 1999

1. Registration as a Credit Rating Agency
2. General Obligations of Credit Rating Agencies
3. Appointment of Compliance Officer
4. Steps on auditor’s report
5. Confidentiality
6. Rating process
7. Restrictions on Rating of Securities issued by Promoters
8. Code of conduct of the Credit Rating Agencies

XXII. SEBI (CUSTODIAN) REGULATIONS, 1996

1. Custodian and Custodial Services
2. Registration and Eligibility
3. General Obligations and Responsibilities of Custodians
4. Appointment of Compliance Officer
5. Code of Conduct

XXIII. PROXY ADVISORS

1. Introduction
2. Impact of Proxy Advisors on Corporate governance
3. Internal Controls and Disclosures under Research Analyst Regulations, 2014
4. Procedural guidelines prescribed for Proxy Advisors
5. Grievance redressal between listed entities and proxy advisers

ANNEXURE 1: LIST OF SEBI MANDATED NISM CERTIFICATIONS UNDER SEBI (CAPSM) REGULATIONS, 2007