NISM-Series-VII: Securities Operations and Risk Management Certification Examination Mock Test
Master Indian securities operations, clearing, settlement, and regulatory risk management compliance.
About the NISM Series VII SORM exam
Overview of the NISM-Series-VII SORM Examination
The National Institute of Securities Markets (NISM) Series-VII: Securities Operations and Risk Management (SORM) Certification Examination is a regulatory benchmark test mandated by the Securities and Exchange Board of India (SEBI). Under the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007, any professional employed with a registered intermediary—such as a stockbroker or clearing member—who handles operational processes, risk management, trade confirmation, settlement, collateral maintenance, or client account administration must obtain this certification.
The primary objective of the examination is to establish a unified minimum standard of foundational knowledge across India's financial market operations. Candidates are assessed on their comprehension of market structure, the lifecycle of a financial transaction, trade processing, risk mitigation protocols, and compliance obligations. Given the increasing speed of straight-through processing (STP) and the regulatory focus on settlement risk, qualifying in this examination demonstrates practical competence in maintaining market stability and safeguarding investor assets.
Examination Syllabus Breakdown
The official curriculum encompasses the critical operational aspects of Indian capital markets, ranging from primary issuances to secondary market risk containment:
- Introduction to the Securities Market: Indian financial ecosystem overview, equity and debt capital raising mechanisms, primary versus secondary markets, role of exchanges, clearing corporations, and depositories.
- Market Participants: Roles and duties of stock exchanges, clearing corporations, depositories, depository participants (DPs), clearing banks, custodians, merchant bankers, and registrar and transfer agents (RTAs).
- Introduction to the Clearing and Settlement Process: Transaction lifecycle from pre-trade validation, trade execution, and confirmation, through to novation, clearing netting, and settlement.
- Margin and Risk Management Systems: Value at Risk (VaR) margins, extreme loss margins (ELM), mark-to-market (MTM) margins, peak margin calculations, capital adequacy norms, liquid assets requirements, and circuit breakers.
- Settlement Mechanism in Cash and Derivatives Segments: Delivery Versus Payment (DVP), T+1 settlement cycles, direct pay-out to client demat accounts, auction and corporate actions processing, and settlement guarantee funds.
- Securities Lending and Borrowing (SLB) Framework: Mechanics of SLB, authorized intermediaries, lending and borrowing fees, recall and repayment transactions, and collateral management.
- Depository Operations and Client Servicing: Account opening (KYC/CKYC), dematerialization and rematerialization, pledging and hypothecation, transmission, and statement generation.
- Regulatory Reporting, Compliance, and Internal Controls: SEBI inspectorial mandates, Prevention of Money Laundering Act (PMLA) provisions, Know Your Client (KYC) norms, internal audits, and segregation of client funds and securities.
- Investor Grievances and Arbitration Mechanisms: SCORES platform, internal dispute handling by brokers, arbitration proceedings, appellate mechanisms, and the Investor Protection Fund (IPF).
Test Rules and Candidate Protocols
- Admit Card and Identity Verification: Candidates must produce a printed copy of the NISM Admit Card along with an original, valid government-issued photo identity proof (such as a PAN Card, Aadhaar Card, Passport, or Driving License).
- Reporting Window: Candidates are required to report to the designated test center at least 30 minutes before the scheduled exam commencement time. Late arrivals are strictly barred from entering the examination hall.
- Prohibited Electronic Devices: Mobile phones, smartwatches, programmable calculators, electronic storage media, and paper study notes are strictly forbidden inside the testing enclosure.
- Permitted Aids: Only non-programmable physical scientific or basic memory calculators and rough blank sheets provided by the invigilator are permitted.
- Exam Security: The test is administered in an invigilated computer-based environment; any form of malpractice, screen switching, or external assistance leads to immediate disqualification and regulatory debarment.
- Result Generation: An automated score report is generated immediately upon test submission, and an authenticated digital certificate is issued through the NISM portal within a few business days.
Scoring Model and Passing Standards
The examination consists of multiple-choice questions designed to evaluate both conceptual grasp and numerical computation skills. The passing threshold is established at 50%:
- Total Questions: 100 questions in the complete official exam (mock simulations typically feature 50 balanced questions).
- Marks per Question: 1 mark for each accurate answer.
- Negative Marking: A penalty of 0.25 marks (25%) is deducted for every incorrect response.
- Unattempted Questions: Zero penalty; unanswered questions carry no negative deduction.
- Certification Validity: The NISM Series VII certificate remains valid for 3 years from the date of passing, after which recertification or continuous professional education (CPE) is required.
Preparation Tips for Aspiring Operations Professionals
To clear the NISM Series VII on your first attempt, follow an organized study plan centered around operational workflows. Start by studying the official NISM workbook thoroughly, with particular emphasis on margin formulas, settlement timelines under the T+1 framework, and SEBI segregation circulars. Make concise notes on mandatory margin percentages, auction settlement dates, and the precise roles of clearing corporations versus clearing banks.
Dedicate substantial effort to practicing computational problems involving VaR margins, MTM profit and loss calculations, and short-allocation penalties. Finally, take timed mock tests to fine-tune your pacing and eliminate guesswork that triggers negative marks. Review your mistakes after every mock exam to identify conceptual weaknesses before sitting for the official test.
Test rules
- Carry a printed NISM Admit Card along with an original government-issued photo identity proof.
- Arrive at the testing center at least 30 minutes prior to the scheduled exam start time.
- Mobile phones, smartwatches, digital devices, and personal notes are strictly banned from the test hall.
- Only standard, non-programmable calculators are permissible for arithmetic calculations.
- Rough paper provided by the testing administrator must be returned prior to exiting the test room.
- Attempting to copy, share questions, or access prohibited materials results in instant debarment.
Score grading
Scored out of 100 maximum marks. Each correct answer earns 1 mark, each incorrect answer incurs a penalty of 0.25 marks (25% negative marking), and unattempted questions receive 0 marks. The passing threshold is 50%.
Syllabus & chapters covered
FAQs
It is mandatory under SEBI regulations for employees and associated persons working with registered stockbrokers and clearing members in operations, clearing, settlement, risk management, and client demat account administration.
Candidates must achieve at least 50% marks to pass. In the official 100-mark paper, that corresponds to a minimum score of 50 marks after accounting for negative marking.
Yes, there is a 25% negative marking policy. Every incorrect answer results in a deduction of 0.25 marks, while unattempted questions attract no penalty.
The certification is valid for 3 years from the examination pass date. It can be renewed by re-taking the examination or completing an authorized NISM Continuous Professional Education (CPE) program.
Yes, basic non-programmable calculators are allowed in the examination center for computational questions, subject to invigilator inspection. Programmable and scientific graphing calculators are prohibited.