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Key Facts: NISM Series XXIV Exam

50%

Passing Score

NISM

Questions

MCQ Format

60 minutes

Duration

1 hour

₹885

Exam Fee

NISM

The NISM Series XXIV: AML and CFT Provisions exam requires a 50% passing score in 60 minutes. The exam fee is ₹885, and there is no negative marking.

Sample NISM Series XXIV Practice Questions

Try these sample questions to review concepts for the NISM Series XXIV exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 99+ question experience with AI tutoring.

1Which of the following describes the first stage of money laundering, where illicit funds are introduced into the formal financial system?

A.Placement

B.Layering

C.Integration

D.Structuring

Explanation: Placement is the initial stage where proceeds of criminal activity are introduced into the financial system. This is done to convert cash to other assets and distance it from the crime scene.

2In the context of money laundering, which stage involves moving funds through a series of complex transactions to obscure the source of the funds?

A.Integration

B.Placement

C.Layering

D.Co-mingling

Explanation: Layering is the stage that involves moving funds through complex transactions (such as buying/selling securities, wire transfers, or using shell companies) to hide their illicit origin. This separates the proceeds of crime from their source.

3Which of the following is the final stage of money laundering, where the laundered funds reappear in the economy as seemingly clean, legitimate investments?

A.Layering

B.Integration

C.Placement

D.Structuring

Explanation: Integration is the final stage where the laundered wealth is successfully incorporated back into the financial system. This allows the criminal to use the funds as legitimate assets without attracting suspicion.

4Which of the following actions is a typical example of 'placement' in the securities market context?

A.A client transferring funds from an offshore shell bank to an onshore stockbroker via electronic wire transfer.

B.A client executing multiple off-market share transfers between various dummy demat accounts.

C.A client buying real estate properties using dividends earned from a legitimate stock portfolio.

D.A client purchasing mutual fund units through a series of small, unconnected cash deposits at bank branches.

Explanation: Placement involves introducing physical cash or cash equivalents into the financial system. Depositing cash into mutual fund accounts is a clear example of placement.

5Why is the layering stage of money laundering particularly difficult to detect in the securities market?

A.Depositing physical cash directly into stock exchange trading terminals is very common.

B.Securities transactions are exempt from Know Your Customer (KYC) norms.

C.The high liquidity, speed of transaction execution, and volume of electronic trading make it easy to mask audit trails.

D.The Enforcement Directorate does not have jurisdiction over securities transactions.

Explanation: The securities market is highly liquid, operates at extremely high speeds, and processes vast volumes of transactions. This permits money launderers to execute rapid buy/sell cycles and off-market transfers, effectively complicating the audit trail.

6Which of the following best describes the core mandate of the Financial Action Task Force (FATF)?

A.To set global standards and promote effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and proliferation financing.

B.To directly prosecute individuals accused of money laundering offences across the world.

C.To act as a central global intelligence database for collecting all Suspicious Transaction Reports filed globally.

D.To license stockbrokers and mutual funds operating in developing financial markets.

Explanation: The FATF is an intergovernmental policymaking body established to set standards and promote legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other threats to the integrity of the international financial system. It was established in 1989 by the G7 Summit in Paris to coordinate global efforts.

7What is the primary significance of the Vienna Convention (1988) in the history of international anti-money laundering frameworks?

A.It mandated the setup of a single global Financial Intelligence Unit.

B.It established the Financial Action Task Force (FATF).

C.It prohibited the use of cash in international import-export trades.

D.It was the first international treaty to establish money laundering as a criminal offence, specifically focusing on drug trafficking proceeds.

Explanation: The United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention, 1988) was the first major international agreement to criminalize money laundering, although its scope was limited to drug trafficking offences. It laid the groundwork for international judicial cooperation and asset forfeiture.

8How did the Palermo Convention (2000) expand the scope of international anti-money laundering laws relative to the Vienna Convention (1988)?

A.It focused exclusively on combating cybercrime and internet frauds.

B.It expanded the scope of money laundering predicate offences to include all serious crimes, not just drug trafficking.

C.It abolished bank secrecy laws globally.

D.It mandated the registration of all stockbroking terminals with the UN.

Explanation: The UN Convention Against Transnational Organized Crime (Palermo Convention, 2000) significantly expanded the scope of money laundering offences by urging member states to cover all serious crimes as predicate offences, moving beyond the drug-trafficking focus of the Vienna Convention. It also emphasized the importance of international cooperation in tracking and seizing criminal assets.

9What does 'Proliferation Financing' (PF) refer to under the FATF recommendations?

A.Providing funds or financial services for the manufacture, acquisition, possession, export, trans-shipment, or use of nuclear, chemical, or biological weapons.

B.Financing the rapid growth of unregistered sub-brokers in developing capital markets.

C.Providing funds to political parties in democratic nations to gain policy influence.

D.The illegal transfer of funds to expand illegal corporate monopolies in the retail sector.

Explanation: Proliferation Financing refers to the provision of funds or financial services for chemical, biological, nuclear, or radiological weapons and their delivery systems, in violation of national laws or international obligations. It is regulated strictly under FATF Recommendation 7 to prevent the spread of weapons of mass destruction.

10Which of the following is a primary distinction between Money Laundering (ML) and Terrorist Financing (TF)?

A.Terrorist financing only involves cash, while money laundering only involves electronic transfers.

B.Money laundering is investigated by the local police, while terrorist financing is investigated exclusively by the central bank.

C.Money laundering always involves proceeds from illegal activities, whereas terrorist financing can involve funds from legitimate sources.

D.Money laundering has no international routing, whereas terrorist financing is always cross-border.

Explanation: Money laundering involves processing dirty money (criminal proceeds) to make it look clean. Terrorist financing, however, focuses on the destination of funds (supporting terror activities), which means the source can be legitimate (such as charity donations or clean income) or illegitimate.

About the NISM Series XXIV Exam

The NISM Series XXIV Certification Examination establishes a minimum knowledge benchmark for compliance officers and staff engaged with anti-money laundering and countering terrorism financing compliance in India.

Exam sponsor: NISM. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Questions

50 questions

Time Limit

60 minutes

Passing Score

50%

Exam / Certification Fees

₹885

Exam sponsor website

Reported exam pass rate: Not Published. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

NISM Series XXIV Official Page

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

20%

Introduction to AML, CFT, and PF

Basics of Money Laundering, Terrorism Financing, and Proliferation Financing.

30%

PMLA 2002 and PML Rules 2005

Prevention of Money Laundering Act statutory requirements, record maintenance, and reporting.

30%

AML/CFT Global Guidelines and SEBI Guidelines

FATF, Basel guidelines, Principal Officer and Designated Director obligations, and KYC norms.

20%

Legal Case Studies

Key judicial and regulatory orders on AML/CFT violations in securities markets.

Preparing for the NISM Series XXIV Exam

What You Need to Know

Passing score: 50%
Exam length: 50 questions
Time limit: 60 minutes
Exam / certification fees: ₹885 Official sources

Using Our Practice Resources

Work through all 99 available questions
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NISM Series XXIV: Suggested Study Strategy

1Focus on statutory definitions under PMLA 2002, such as 'scheduled offence' and 'reporting entity'.

2Learn the reporting thresholds: CTR (₹10 lakh and above) and STR reporting timelines.

3Understand the roles of the Principal Officer, Designated Director, and the tipping-off prohibition.

4Review the key PMLA case studies listed in the NISM workbook.

Frequently Asked Questions

What is the NISM Series XXIV exam?

It is a certification exam focused on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) rules for securities market intermediaries in India.

Is there negative marking in NISM Series XXIV?

No, there is no negative marking in the NISM Series XXIV exam.

Free Practice Questions for NISM Series XXIV

NISM Series XXIV AML and CFT Provisions in Securities Markets

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