NISM Series VII : Securities Operations and Risk Management (SORM) Examination
By Ramkumar A (Stock Market Trainer) & The ModelExam Question
Bank Team
NISM Series VII Securities Operations and Risk Management (SORM) Examination is a mandatory SEBI-regulated certification for professionals and dealers working in the back-office operations, risk management, clearing, and settlement divisions of registered stock-broking firms and clearing members in India.
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SORM full form is Securities Operations & Risk Management. This NISM Series 7 exam is a compulsory certification for employees of registered stock-brokers, trading members, or clearing members in recognized stock exchanges who are involved in:
- Assets or funds of investors or clients
- Redressal of investor grievances
- Internal control or risk management
- Activities having a bearing on operational risk
- Approved users (Dealers) of the trading member of a Registered Stock Broker or Trading Member or Clearing Member of a recognized stock exchange.
- Employees of Stock Brokers and Sub-Brokers in the Capital Market Segment.
- Students of all disciplines, especially MBA Finance, B.Com, M.Com, lecturers, and finance professionals.
- Anyone seeking a career in securities operations, clearing, settlement, or risk management.
You can attempt the free demo mock test immediately by clicking on the Free Demo button on the card, or access comprehensive chapter-wise tests by choosing a premium plan.
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Expert Insights: Cracking NISM Series 7
"SORM (NISM 7) is all about operational workflows. Focus on the Clearing and Settlement cycles and the role of various market participants. Focus on Chapter 3, 5 and 6. Those chapters make up 50% weightage."
Broking Operations
Clearing & Settlement
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NISM SORM Training Playlist
Important Candidate Resources
Editorial Note: ModelExam question banks and practice tests are independently authored by certified market experts to assist candidates in passing the official NISM certification. Official curriculum and exam registration are managed by NISM.
Exam Pattern & Structure
| Parameter | Details |
|---|---|
| Exam Duration | 120 Minutes (2 Hours) |
| Number of Questions | 100 Multiple Choice Questions |
| Maximum Marks | 100 Marks |
| Passing Mark | 50% (50 Marks) |
| Negative Marking | 25% (0.25 mark per wrong answer) |
| Certificate Validity | 3 Years |
| Exam Fee | Rs 1500/- + Applicable Taxes |
Syllabus Weightage
| Unit / Topic | Topic Name | Weightage |
|---|---|---|
| Unit 1 | Introduction to Securities Markets | 5% |
| Unit 2 | Market Participants in the Securities Markets | 10% |
| Unit 3 | Introduction to Securities Broking Operations | 20% |
| Unit 4 | Risk Management | 15% |
| Unit 5 | Clearing Process | 15% |
| Unit 6 | Settlement Process | 15% |
| Unit 7 | Investor Grievances and Arbitration | 10% |
| Unit 8 | Other Services Provided by Brokers | 10% |
| Total | 100% | |
How to Prepare and Pass NISM Series VII SORM Exam on First Attempt
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1. Understand the 8-Unit Official NISM SyllabusFamiliarize yourself with all 8 modules, focusing primarily on operational workflows and regulatory mandates.
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2. Prioritize High-Weightage Chapters (50% Marks)Chapter 3 (Broking Operations - 20%), Chapter 5 (Clearing Process - 15%), and Chapter 6 (Settlement Process - 15%) account for half the total exam weightage.
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3. Practice Chapter-Wise Question BanksSolve subject-specific mock questions to master key definitions, settlement cycles (T+1), ASBA procedures, and SCORES mechanism.
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4. Attempt Full-Length Timed Mock TestsSimulate real 120-minute exam conditions using Modelexam practice tests to build pacing and test-day endurance.
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5. Master the 25% Negative Marking StrategyAvoid blind guessing to protect your score; answer high-confidence questions first to secure the 50% passing threshold.
Detailed Syllabus - NISM Series VII SORM
Unit 1: Introduction to the Securities Market
Indian Securities Markets & its role in the Indian economy.- Primary & Secondary markets; public issue avenues; OTC and Exchange traded markets.
- Money Market and key features of money market instruments.
- Equity market and products (shares, debentures, warrants).
- Derivative market (Index/Stock Futures & Options) and Currency derivatives.
- Debt market: Government Securities & Corporate Debt market.
Unit 2: Market Participants in the Securities Market
- Market participants: Investors (Retail, HNI, Institutional).
- Issuers & international capital raising (GDRs, ADRs, FCCBs, ECBs).
- Intermediaries: Stock Exchanges, Clearing Corporations, Trading Members, Depositories, DPs, Custodians.
- Regulatory framework in India & the role of SEBI.
Unit 3: Introduction to Securities Broking Operations
- Trade Life Cycle: Affirmation, confirmation, custodial transactions, clearing & settlement.
- Front Office: Client onboarding, KYC norms, UCC, Rights & Obligations, Risk Disclosure.
- Order Management: Order types, routing, trade execution, and trade matching.
- Middle Office: Risk management, surveillance mechanisms, and position monitoring.
- Back Office: Trade enrichment, allocation, confirmation, accounting, and broker records.
- IT infrastructure and mandatory regulatory compliances.
Unit 4: Risk Management
- Cash Segment Risk: Margin, VaR, Mark to Market, Extreme Loss Margin, Liquid Assets, Base Minimum Capital.
- F&O Segment Risk: Initial, Exposure, Premium, Assignment Margins, and reporting limits.
- Compliances, penalties for non-compliance, books of accounts, and Risk-Based Supervision.
- Core Settlement Guarantee Fund: Corpus, waterfall, stress testing, and back testing.
Unit 5: Clearing Process
- Step-by-step Clearing Process & role of Clearing Agency / Corporation.
- Functions of Clearing Banks, Clearing Members, and Custodians.
- Role of Depositories & Depository Participants (DPs).
- Differences in clearing between equities and derivatives trading.
- Determination of Obligations: Client Netting vs. Broker Netting.
Unit 6: Settlement Process
- Settlement Cycle (T+1) and procedures for internet/phone trading.
- Settlement of Funds: Client obligations, margin dues, and pay-in / pay-out.
- Settlement of Securities through depository clearing systems.
- Corporate Actions and their adjustments in settlement.
- Auction of Securities: Process on BSE / NSE and close-out procedures.
Unit 7: Investor Grievances and Arbitration
- Investor grievance redressal mechanisms (SCORES & Smart ODR).
- Investor Protection Fund (IPF) / Customer Protection Fund (CPF) at Stock Exchanges.
- Arbitration and appellate arbitration procedures in exchanges.
Unit 8: Other Services Provided by Brokers
- IPO Applications: Collection, processing, and ASBA facility.
- Mutual fund unit transactions on exchange platforms.
- Portfolio Management Services (PMS) and Research services.
- Depository Services provided by brokers.
- Margin Trading Facility (MTF) concept and risk safeguards.