NISM Series III-B Issuers Compliance Interview Questions

While some interviewers have their own style of inquiry, most job interviews follow a set of questions and answers (including some of the most often-asked behavioral interview questions). Here are some of the most often asked interview questions, along with some of the greatest responses. Consider the following NISM Series III-B Issuers Compliance expert interview preparation tips:

1. Explain the Regulatory Framework in India.

The RBI Act establishes the Reserve Bank of India (RBI), which is India’s central bank and the principal regulating authority for the banking sector. The Banking Regulation Act 1949 (BR Act) is the fundamental legislation controlling the Indian banking sector. The RBI Act and the BR Act empower the RBI to establish rules, regulations, instructions, and guidelines on a wide variety of banking and financial concerns in India in order to implement regulatory policies.

2. What is the SEBI Act, 1992?

The Securities and Exchange Board of India is known as SEBI. It is a statutory regulatory agency established by the Government of India in 1992 to safeguard and regulate the interests of investors in securities. SEBI also oversees the operation of the stock market and mutual funds.

3. Do you know about the Securities Contracts (Regulation) Act, 1956?

A body corporate constituted under the Companies Act, 1956 (1 of 1956) for the purpose of helping, regulating, or controlling the business of purchasing, selling, or dealing in securities, whether under a system of corporatization and demutualization or otherwise.

4. Describe the Listing Agreement.

A listing agreement is a contract between a property owner and a real estate broker that allows the broker to serve as the seller’s representative and locate a buyer for the property. Open listing, exclusive agency listing, and exclusive right-to-sell listing are the three forms of real estate listing agreements.

5. What do you understand about Foreign Exchange Management Act, 1999 (FEMA)?

The Foreign Exchange Management Act of 1999 (FEMA) was passed by the Indian Parliament with the goal of “consolidating and amending the law relating to foreign exchange with the objective of facilitating external trade and payments and promoting the orderly development and maintenance of the foreign exchange market in India.”

6. Explain the Prevention of Money Laundering Act, 2002 (PMLA).

The Prevention of Money Laundering Act of 2002 was create to combat the criminal offense of legalizing illegally obtained income or profits. The Prevention of Money Laundering Act of 2002 empowers the government or a public authority to seize property acquired through illicit means.

7. Explain the Competition Act, 2002.

It’s a mechanism for enforcing competition policy, as well as preventing and punishing anti-competitive business behavior and needless government intervention in the market.

8. What do you understand by SEBI (Delisting of Equity Shares), Regulations, 2009?

The Securities Exchange Board of India (‘SEBI’) issued the SEBI (Delisting of Equity Shares) Regulations, 2021[1] (‘Delisting Regulations, 2021’) on June 11, 2021, superseding the erstwhile SEBI (Delisting of Equity Shares) Regulations, 2009[2] (‘Erstwhile Regulations’) in order to make the existing delisting Regulations more robust, efficient, transparent, and investor-friendly. On June 10, 2009, the Former Regulations were publish. Following that, various adjustments to the delisting regulations were made in response to changing market conditions and developments. The Delisting Regulations were design to streamline and enhance the delisting procedure.

9. Describe the role of a compliance officer.

A compliance officer ensures that a company’s external regulatory and legal requirements, as well as its internal policies and bylaws, are met. Compliance officers have a responsibility to their employers to identify and manage regulatory risk in collaboration with management and staff.

10. What are the general Obligations during Public Issues?

A general obligation bond (GO bond) is a municipal bond guaranteed simply by the issuing jurisdiction’s credit and taxing capacity, rather than revenue from a specific project. The assumption behind general obligation bonds is that a municipality will be able to service its debt commitment through taxation or project revenue. There are no assets utilized as collateral.

11. How do we do the Allotment of Shares is done?

The following are two scenarios in which a company’s condition could be:

The total number of successful bids equals or is fewer than the number of shares offered by the company.
The total number of successful bids exceeds the number of shares available from the company.

Case 1: The total number of bids received is less than or equal to the total number of shares available.

If the total number of bids received by the applicants is less than or equal to the number of shares being offered, the stock will be fully allocated. As a result, shares will be given to each candidate who has applied.

Case 2: The total number of bids exceeds the number of shares available.

As a result, you now have the total number of successful bids for the IPO. If the total number of bids receive by the applicants is less than or equal to the number of shares being offer, the stock will be fully allocate.

12. How to plan an IPO?

An initial public offering, or IPO, is the first opportunity for most individual investors to purchase a share of a fledgling company’s ownership.
It’s a chance for early-stage investors and insiders to profit.
It’s an opportunity for the company to raise funds for development and expansion.
A corporation must reveal its books to potential investors and financial regulators in order to become public.
The prospectus and executive “roadshow” provide a more comprehensive look into the company’s aims and prospects.

13. What is the bonus issue?

A bonus issue, also known as a scrip issue or a capitalization issue, is when a company offers existing shareholders free additional shares. As an alternative to boosting the dividend, a firm may decide to distribute additional shares. For every five shares held, a firm may offer one bonus share.

14. Can I trade when the market is closed?

After the market has close or been shut down, you cannot trade. Even if physical presence is no longer require for trading, it is impossible to trade after the market has close. You can only change from 9:15 a.m. to 3:30 p.m., yet many passive investors trade outside of those hours. AMO, or After Market Orders, are orders place after trading hours, and they can cause a volatile market. AMO also generates price swings in the stock market.

15. How many different stock market sectors are there?

In the stock market, you can invest in 11 different areas. This type of industry classification aids the portfolio manager in building a varied portfolio and more efficiently allocating assets.

16. Where Can I Look for Undervalued Stocks?

Stocks that are undervalue are those that are priced below their fair value. Fundamental and technical research are use by investors to locate these stocks. Fundamental analysis is the process of assessing asset value by looking at external factors such as industry trends. Technical analysis involves analyzing price fluctuations using historical data. Traders use these strategies to determine the fair price of undervalued stocks. You can always conduct additional studies to find answers to your share market questions about undervalued stocks.

17. How can you locate good firms in the Indian stock market, which has a lot of them?

Many online tools exist to help you locate good stocks. The stock screener can help you locate good stocks from all the companies listed on the stock exchange. You can apply other filters, such as valuations and the company’s market capitalization.

18. How much time should I devote to stock research?

The sort of investment determines how to research stocks. If you’re trading rather than investing, you can use historical charts, price trends, and so on. You won’t have to spend a lot of time researching. If you intend to invest for the long term, you should conduct extensive research on the organization. If the investment time is more than a year, you must conduct a study into the company’s fundamentals, financial statements, competitive analysis, and so on.

19. Are small-cap stocks more profitable than blue-chip stocks?

You should analyze the company’s future prospects before investing in any stocks. In comparison to bluechip corporations, all small cap companies have better growth potential. Large-cap firms, on the other hand, have already established themselves in the market and provide significant returns to shareholders. To summarise, investing in small caps might be advantageous if the company’s future prospects are excellent.

20. Should I invest in stocks during a bull market?

Create a watchlist and keep an eye on the stocks in this scenario while the market is high. Once you’ve found some good stocks, average them out to lower your odds of buying them at a high price.

21. In my portfolio, how many stocks should I buy?

There should be no over-or under-diversification in the portfolio. An over-diversified portfolio is difficult to track and does not produce good results. If you invest in a small number of stocks in your portfolio, however, the decline of one stock will have a negative influence on your entire portfolio.

22. What kind of market returns may I expect in NISM Series III-B Issuers Compliance?

The returns are determine by the performance of your performing and non-performing stocks. When you have a well-diversified portfolio, certain stocks will perform well while others will not, affecting your results.

23. How much time should I devote to stock research?

24. Is it more advantageous to invest in small-cap stocks than in blue-chip stocks?

In comparison to bluechip corporations, small-cap companies have the ability to grow faster. There may be some hidden diamonds in the small-cap industry that the market has yet to discover. Large-cap enterprises, on the other hand, have already shown their worth to the market.

Furthermore, the stock quality is more essential than the company’s size. Several large-cap corporations have continuously provided positive returns to their owners. Overall, tiny caps might be more profitable than large caps if the company’s fundamentals and future prospects appear positive.

25. Should I buy equities while the market is at its peak in NISM Series III-B Issuers Compliance?

If the market is high, start compiling a stock watchlist. Keep an eye on the fundamentally sound stocks. Avoid lump sum investments if the investor finds some good stocks and is ready to invest. By averaging the stocks, you’ll be less likely to acquire them at a high price.

26. What types of stocks should you avoid investing in NISM Series III-B Issuers Compliance?

Individuals should stay away from equities with limited liquidity. Trading in these stocks is difficult due to limited liquidity. Furthermore, finding data to analyze these companies may be difficult due to the scarcity of information on public platforms. As a result, a lack of investigation may lead to risky investments. Additionally, penny stocks should be avoided at all costs.

27. What is the purpose of the SEBI Act?

SEBI was establish with the goal of creating a climate that facilitates resource mobilization and allocation. It offers best practices, a framework, and infrastructure to satisfy rising demand.

It caters to the following demographics:

Issuer: SEBI provides issuers with a marketplace through which they can raise funds.
Investors: It ensures that accurate information is available and is update on a regular basis.
Intermediaries: By putting in place sufficient infrastructure, it creates a competitive market for intermediaries.

28. Explain the structure of SEBI.

The SEBI board has nine members. The following individuals make up the Board of Directors.

The Central Government of India appoints one Chairman of the Board.
One member of the Board is appointed by the Reserve Bank of India (RBI).
Two members of the Board come from the Union Ministry of Finance.
The Central Government of India elects five members to the Board.

29. What are the objectives of SEBI?

The following are some of the SEBI’s goals:

Investor Protection: One of the most essential goals of SEBI is to protect investors. It entails safeguarding investors’ interests by giving counsel and guaranteeing that the investment made is secure.
Preventing fraudulent trading practices and malpractices, as well as stock exchange activity regulation
Develop a code of behavior for financial intermediaries such as underwriters, brokers, and other financial intermediaries.
To strike a balance between statutory and self-regulatory requirements.

30. What exactly are IRR and ARR in NISM Series III-B Issuers Compliance?

Internal rate of return and accounting rate of return is also use to evaluate and analyze investment decisions.
The discount rate or discount factor that reduces a project’s net present value to zero is known as the internal rate of return. In simple terms, it is the anticipated annual compound rate of return on a project or investment.
The accounting rate of return (ARR) is a formula that calculates the projected percentage rate of return on an investment or project as a percentage of the initial investment value.

NISM Series III-B Issuers Compliance free practice test