NISM-Series-7: Securities Operations and Risk Management Mock Tests
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Take Final TestNISM Series 7 Mock Test 2025 – Free Practice for Securities Operations and Risk Management Exam
If you work — or want to work — in the back-office operations, clearing, settlement, or risk management functions of a stock broker, depository participant, clearing member, or custodian in India, the NISM Series 7 (NISM-Series-VII: Securities Operations and Risk Management) certification is mandatory.
This page provides free NISM Series 7 mock test practice, a complete syllabus breakdown, a step-by-step preparation guide, explanations of India's T+1 settlement system and VaR-based margin framework, and answers to the most commonly searched questions about the NISM Series VII exam. PassNISM.in's expert-curated question bank will help you pass on your first attempt.
NISM Series 7 Exam Pattern – Key Details
| Parameter | Details |
|---|---|
| Certification Name | NISM Series-VII: Securities Operations and Risk Management Examination |
| Conducted By | NISM (National Institute of Securities Markets) — mandated by SEBI |
| Required For | Operations, clearing, settlement, and risk management staff at SEBI-registered entities |
| Number of Questions | 100 MCQs |
| Total Marks | 100 |
| Passing Score | 60 out of 100 (60%) |
| Exam Duration | 2 Hours |
| Negative Marking | 25% (–0.25 marks per wrong answer) |
| Mode | Online — Prometric Testing Centres across India |
| Certificate Validity | 3 Years from date of passing |
NISM Series 7 Syllabus – Complete Chapter-Wise Breakdown
- Indian Capital Market Overview — Primary market, secondary market, role of NSE, BSE, SEBI, and IOSCO
- Securities Market Participants — Stock brokers, sub-brokers, depository participants, custodians, clearing members, AMCs
- Trading Mechanisms — Order types (limit, market, SL, SL-M), order matching, trade confirmation, auction mechanism
- Clearing and Settlement — T+1 rolling settlement, multilateral netting, Delivery vs. Payment (DVP), pay-in, pay-out
- Depositories and Dematerialisation — NSDL and CDSL, demat accounts, DP accounts, dematerialisation, rematerialisation
- Corporate Actions and Their Settlement Impact — Dividends, bonus shares, rights issues, stock splits, buybacks, ex-dates, record dates
- Risk Management in Securities Markets — Value at Risk (VaR), Extreme Loss Margin (ELM), Initial Margin, MTM Margin, Special Margin
- Regulatory Framework — SEBI Act 1992, Securities Contracts (Regulation) Act 1956 (SCRA), Depositories Act 1996
- Investor Protection Mechanisms — Investor Grievance Redressal, SCORES platform, Investor Protection Fund (IPF)
- KYC and AML Requirements — KYC norms, PMLA, suspicious transaction reporting
- Accounting for Securities Transactions — Trade date vs. settlement date accounting, securities transaction tax (STT)
Step-by-Step Preparation Guide for NISM Series 7
Step 1 – Understand India's T+1 Settlement System (Critical Topic)
India migrated to T+1 rolling settlement for all equity securities from January 2023 — making it one of the fastest settlement cycles in the world. Understanding the T+1 workflow in full detail is among the most important preparation tasks for this exam. Walk through the complete daily timeline until it is second nature.
Step 2 – Master Risk Management and Margin Concepts
The risk management chapter typically carries the highest weightage in the NISM Series 7 examination. Understand VaR (Value at Risk), how margins are calculated by India's clearing corporations (NSCCL for NSE, ICCL for BSE), and what triggers a margin call. All margin types — VaR, ELM, MTM, and Special Margin — must be clearly understood with examples.
Step 3 – Understand Depositories, Demat, and Corporate Actions
India has two depositories: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). Know the difference between a Beneficial Owner (BO) account (held by investors) and a clearing member account (held by clearing members). For corporate actions, understand how ex-dates, record dates, and payment dates affect open positions in the settlement system.
Step 4 – Revise the Three Key Acts in the Regulatory Framework
The examination tests three foundational Acts directly:
- SEBI Act 1992 — Powers of SEBI, board composition, functions, investigation powers
- SCRA 1956 (Securities Contracts Regulation Act) — Definition of 'securities', listing requirements, recognised stock exchanges
- Depositories Act 1996 — Dematerialisation framework, rights of beneficial owners, obligations of DPs
Step 5 – Take Full-Length NISM Series 7 Mock Tests
After covering the full syllabus, take full-length NISM Series 7 mock tests on PassNISM.in under strict exam conditions. Your target should be consistently scoring 70%+ in mock tests before your actual exam date — the 10% buffer above the 60% pass mark absorbs exam-day uncertainty.
India's T+1 Settlement Cycle – Fully Explained
Understanding the T+1 settlement cycle is essential for the NISM Series 7 examination. Here is the complete daily workflow:
| Day | Activity | Who Does It |
|---|---|---|
| T (Trade Day) | Trade executed on NSE or BSE | Investor → Broker → Exchange |
| T (Trade Day — Evening) | Trade confirmation, obligation netting, settlement schedule issued | Clearing Corporation (NSCCL/ICCL) |
| T+1 (Morning) | Pay-in of funds and securities by clearing members | Clearing Members → Clearing Corporation |
| T+1 (Afternoon) | Pay-out of funds and securities to clearing members | Clearing Corporation → Clearing Members → Investors |
Result: An investor who buys shares on Monday will have the shares credited to their demat account (NSDL/CDSL) by Tuesday afternoon. Funds are debited by Tuesday morning. This is the T+1 cycle in full.
Risk Management in India's Securities Market – Margins Explained
India's clearing corporations use a sophisticated Value at Risk (VaR)-based margining system developed by NSCCL and ICCL. Here is what you must know for the NISM Series 7 exam:
Types of Margins in the Indian Securities Market
| Margin Type | What It Covers | Calculated By |
|---|---|---|
| VaR Margin | Potential 1-day loss at 99% confidence level | NSCCL / ICCL (based on historical volatility) |
| Extreme Loss Margin (ELM) | Additional margin to cover losses beyond VaR — tail risk | Fixed by clearing corporation per security type |
| Mark-to-Market (MTM) Margin | Daily unrealised loss on open positions vs. previous close | Settled daily in cash by clearing members |
| Special Margin | Imposed on specific securities during extreme volatility periods | Exchanges / SEBI — ad hoc basis |
VaR Margin – Concept and Calculation
VaR = Portfolio Value × VaR % (based on 99th percentile of historical return distribution)
Liquid large-cap stocks (e.g., those in the Nifty 50 index) attract a lower VaR margin percentage because they are less volatile. Illiquid small-cap or penny stocks attract much higher VaR margins. This differentiation is directly tested in NISM Series 7 mock tests.
Depositories – NSDL vs. CDSL
| Feature | NSDL | CDSL |
|---|---|---|
| Full Form | National Securities Depository Limited | Central Depository Services Limited |
| Promoted By | NSE, UTI, IDBI, SBI | BSE, SBI, Bank of Baroda, Bank of India |
| Established | 1996 | 1999 |
| Account Identification | DP ID + Client ID (16-digit) | 8-digit Beneficiary Owner (BO) ID |
| Market Share | ~55% of demat accounts by value | ~45% — larger number of active retail accounts |
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NISM-Series-7: Securities Operations and Risk Management Workbook
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- Each test contains multiple-choice questions.
- Total 100 questions per test.
- Navigate freely between questions.
- Submit test to view your results.
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