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100+ Free NISM Series VII (SORM) Practice Questions

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Key Facts: NISM Series VII (SORM) Exam

100 questions

NISM Series VII (SORM) has 100 one-mark multiple-choice questions totalling 100 marks

NISM - SORM assessment structure

2 hours

Candidates must complete the NISM Series VII exam in 120 minutes

NISM - SORM assessment structure

50% pass

The passing score for NISM Series VII is 50 out of 100 marks

NISM - SORM FAQ

25% negative marking

Each wrong answer deducts 25% of the marks assigned to the question

NISM - SORM assessment structure

Rs. 1,500

The NISM Series VII examination fee is Rupees one thousand five hundred

NISM - SORM FAQ

3 years

The NISM SORM certificate is valid for 3 years from the date of the exam

NISM - SORM certification page

8 chapters

The SORM syllabus is divided into eight weighted chapters

NISM - SORM curriculum

100

Free original practice questions here

OpenExamPrep

NISM-Series-VII (SORM) is a SEBI-mandated certification from the National Institute of Securities Markets for associated persons of registered stock-brokers, trading members and clearing members handling operations, risk and investor grievances. The exam has 100 one-mark multiple-choice questions to be completed in 2 hours, with a 50% passing score and negative marking of 25% of the marks per wrong answer. The fee is Rs. 1,500 and the certificate is valid for 3 years from the date of the exam. The syllabus is weighted toward broking operations (20%), with risk management, clearing and settlement at 15% each. This 100-question bank gives original practice across the full SORM curriculum with explanations for every option.

Sample NISM Series VII (SORM) Practice Questions

Try these sample questions to test your NISM Series VII (SORM) exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the primary economic function of securities markets in India?
A.To guarantee fixed returns to all investors
B.To channelise surplus funds from savers to users of capital
C.To fix the prices of all listed companies
D.To replace the banking system entirely
Explanation: Securities markets enable the efficient transfer and allocation of resources by channelising surplus funds from savers (households, institutions) to users of capital (businesses, governments) for productive activity. They do not guarantee returns or fix prices.
2In which market are newly issued securities sold to investors for the first time, with proceeds going to the issuer?
A.Secondary market
B.Primary market
C.Money market
D.Derivatives market
Explanation: The primary market is where securities are issued for the first time, such as through an IPO, and the proceeds flow directly to the issuing company. The secondary market is where existing securities are subsequently traded among investors.
3Which of the following is a key feature of the money market?
A.It deals in long-term equity capital
B.It deals in short-term debt instruments of up to one year
C.It deals exclusively in real estate
D.It deals only in foreign currency
Explanation: The money market deals in short-term debt instruments with maturities of up to one year, such as Treasury Bills, commercial paper and certificates of deposit. It provides liquidity and short-term funding.
4A debenture issued by a company represents which of the following to its holder?
A.An ownership stake in the company
B.A debt obligation of the company
C.A share in future dividends only
D.A voting right at shareholder meetings
Explanation: A debenture is a debt instrument; the holder is a creditor of the company entitled to interest and repayment of principal, not an owner. Equity shares, by contrast, confer ownership.
5Which statement best describes the secondary market?
A.It is where companies first raise capital from the public
B.It is where existing securities are traded among investors
C.It is where only government securities are auctioned
D.It is where companies are incorporated
Explanation: The secondary market provides liquidity by allowing investors to buy and sell already-issued securities among themselves, for example on the NSE or BSE. The issuing company is not a party to these trades.
6Who is the apex regulator of the securities markets in India?
A.Reserve Bank of India (RBI)
B.Securities and Exchange Board of India (SEBI)
C.Insurance Regulatory and Development Authority (IRDAI)
D.Ministry of Corporate Affairs
Explanation: SEBI is the statutory regulator of the securities markets in India, responsible for protecting investors and regulating exchanges, intermediaries and issuers. NISM itself was established by SEBI.
7A Foreign Portfolio Investor (FPI) is best classified as which type of market participant?
A.An issuer of securities
B.A category of investor
C.A stock exchange
D.A clearing corporation
Explanation: FPIs are institutional investors from outside India who invest in Indian securities; they are a category of investor. Issuers, exchanges and clearing corporations perform different functions.
8Which intermediary helps companies bring new issues to the primary market, advising on pricing and managing the issue process?
A.Merchant banker / lead manager
B.Depository participant
C.Clearing bank
D.Registrar of Companies
Explanation: A merchant banker (lead manager) manages public issues, advises on pricing and structure, and ensures regulatory compliance for the issue. The other entities perform settlement, custody or registration roles, not issue management.
9A stock-broker that is a member of a recognised stock exchange and executes trades on behalf of clients is known as a:
A.Trading member
B.Issuer
C.Registrar and transfer agent
D.Custodian
Explanation: A stock-broker who is a member of an exchange and executes orders for clients is a trading member. Registrars, custodians and issuers have distinct, non-execution roles.
10Which two entities are the principal depositories operating in India?
A.NSE and BSE
B.NSDL and CDSL
C.RBI and SEBI
D.NSCCL and ICCL
Explanation: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) are the two depositories in India that hold securities in dematerialised form. NSE and BSE are exchanges; NSCCL and ICCL are clearing corporations.

About the NISM Series VII (SORM) Exam

NISM-Series-VII: Securities Operations and Risk Management (SORM) is a SEBI-mandated certification administered by the National Institute of Securities Markets. It is the requisite standard for associated persons of registered stock-brokers, trading members and clearing members of recognised stock exchanges who deal with client assets or funds, redressal of investor grievances, internal control or risk management, or activities bearing on operational risk. The syllabus covers the structure of the Indian securities market and its participants; securities broking operations including the trade life cycle, KYC, Unique Client Code and order management; risk management, capital adequacy and margining; the clearing process and the roles of clearing corporations, clearing banks, clearing members, custodians and depositories; the settlement cycle for funds and securities and corporate-action adjustments; investor grievance redressal and arbitration; and other services provided by brokers. The examination has 100 one-mark multiple-choice questions to be completed in two hours, a 50% passing score and negative marking of 25% per wrong answer, and the certificate is valid for three years.

Assessment

100 multiple-choice questions of 1 mark each, totalling 100 marks, drawn from eight chapters covering the securities market, market participants, broking operations, risk management, clearing, settlement, investor grievances and other broker services.

Time Limit

2 hours (120 minutes).

Passing Score

50% (50 out of 100 marks). Negative marking of 25% of the marks assigned to a question applies for each wrong answer.

Exam Fee

Rs. 1,500 (plus payment gateway charges and applicable GST). (National Institute of Securities Markets (NISM), established by SEBI.)

NISM Series VII (SORM) Exam Content Outline

5%

Introduction to the Securities Market

Role of the Indian securities markets in the economy, primary and secondary market structure, money market features and the products traded in the securities market such as equity, debt and derivatives.

10%

Market Participants in the Securities Market

Types of investors (retail, HNI, institutional, FPIs), issuers, intermediaries such as stock-brokers, depository participants and merchant bankers, and the regulators and regulatory framework led by SEBI.

20%

Introduction to Securities Broking Operations

The trade life cycle; front, middle and back office functions; client on-boarding, KYC, Unique Client Code, order types and validity, order routing and execution; and back-office trade enrichment, allocation, confirmation and modification.

15%

Risk Management

Risk management practices in a broking firm, capital adequacy and net worth requirements, client account control, the margining framework (VaR, ELM, MTM, peak margin) and compliance and regulatory reporting.

15%

Clearing Process

The clearing process and the roles of the clearing corporation, clearing banks, clearing members, custodians and depositories/DPs in clearing trades, with separate flows for equities and derivatives.

15%

Settlement Process

The settlement cycle (T+1 rolling settlement for equities), settlement of funds and securities through depositories, settlement of internet-based and telephonic trades, corporate-action adjustments and the auction of securities for short deliveries.

10%

Investor Grievances and Arbitration

Redressal of investor grievances including the SEBI SCORES platform, the Investor Protection Fund, the procedure of arbitration on stock exchanges and the role of appellate arbitration.

10%

Other Services Provided by Brokers

Additional services such as IPO and mutual fund distribution, depository participant services, margin trading facility, portfolio and research support and other value-added broker offerings.

How to Pass the NISM Series VII (SORM) Exam

What You Need to Know

  • Passing score: 50% (50 out of 100 marks). Negative marking of 25% of the marks assigned to a question applies for each wrong answer.
  • Assessment: 100 multiple-choice questions of 1 mark each, totalling 100 marks, drawn from eight chapters covering the securities market, market participants, broking operations, risk management, clearing, settlement, investor grievances and other broker services.
  • Time limit: 2 hours (120 minutes).
  • Exam fee: Rs. 1,500 (plus payment gateway charges and applicable GST).

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

NISM Series VII (SORM) Study Tips from Top Performers

1Prioritise the high-weight chapters: Introduction to Securities Broking Operations is 20% and Risk Management, Clearing and Settlement are 15% each, together making up 65% of the marks.
2Learn the trade life cycle end to end - order placement, routing, execution, confirmation, clearing and settlement - because many questions test the sequence and the participant responsible at each step.
3Memorise the current settlement cycle (T+1 rolling settlement for equities since 2023) and how funds and securities are settled through the clearing corporation and depositories.
4Understand the difference between the clearing corporation, clearing bank, clearing member, custodian and depository participant, as their distinct roles are tested repeatedly.
5Because of the 25% negative marking, avoid wild guessing; eliminate clearly wrong options first and skip a question only if you have no basis for a choice.
6Use the free NISM SORM workbook and attempt timed mock tests so you can comfortably finish 100 questions within the 120-minute limit.

Frequently Asked Questions

How many questions are on the NISM Series VII (SORM) exam and how long is it?

The exam has 100 multiple-choice questions of 1 mark each, totalling 100 marks, and must be completed in 2 hours (120 minutes).

What is the passing score for NISM Series VII?

The passing score is 50%, meaning you must score at least 50 out of 100 marks. There is also negative marking of 25% of the marks assigned to a question for each wrong answer.

Does NISM Series VII have negative marking?

Yes. There is negative marking of 25% of the marks assigned to a question, so each wrong answer deducts 0.25 marks. Unanswered questions are not penalised.

What is the fee and certificate validity for NISM Series VII?

The exam fee is Rs. 1,500 plus payment gateway charges and applicable GST. The certificate is valid for 3 years from the date of the examination.

Who is required to pass the NISM Series VII (SORM) exam?

SEBI mandates it for associated persons of registered stock-brokers, trading members and clearing members who deal with client assets or funds, investor grievance redressal, internal control or risk management, or activities bearing on operational risk.

Are these official NISM practice questions?

No. These are original OpenExamPrep questions modelled on the NISM-Series-VII (SORM) syllabus. NISM provides its own free workbook and certification materials separately on its website.