NISM Series 6 – Depository Operations: PYQ Analysis

The NISM Series 6 exam tests the knowledge required to become a depository participant (DP) in India. A thorough analysis of previous year questions (PYQs) helps you spot patterns, important concepts, and the depth of preparation needed.

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1. Why PYQ Analysis Matters

• Pattern Recognition – Identifies recurring topics and the weightage of each sub‑topic.
• Exam‑Style Familiarity – Helps you adapt to the phrasing and type of questions asked (multiple‑choice, match‑the‑column, assertion‑reason).
• Time Management – Knowing which questions are high‑scoring lets you allocate preparation time efficiently.

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2. Key Themes from PYQs (2015‑2024)

Theme	Typical Sub‑Topics	Approx. Weightage*
Depository Structure & Governance	DEPOT (Depository), NSDL, CDSL, SEBI regulations, roles of DP, Participant, Investor	15%
Account Types & Opening Procedures	Demat account, joint account, beneficial owner, NRO/NRI accounts, KYC requirements	12%
Corporate Actions & Corporate Events	Stock splits, rights issues, bonus issues, dividend, scrip dividend, merger, de‑listing, corporate voting	18%
Settlement Cycle & T+0/T+1/T+2	Delivery vs. cash settlement, NSDL/CDE, settlement instructions, failed settlements, penalties	15%
Reconciliation & Corporate Actions Reporting	Reconciliation of securities, corporate action acknowledgements, e‑voting, dividend reconciliation	10%
Depository Participant (DP) Operations	Opening/closing of DP, maintenance of records, audit, compliance, grievance redressal	12%
Regulatory Framework & Recent Changes	SEBI (Depository) Regulations, amendments (2022‑2024), demat freeze, cyber‑security, IFSC guidelines	8%
Miscellaneous	Demat account freezing, power of attorney, transfer of securities, dividend unclaimed, dematerialisation of physical certificates	10%

*Weightage is derived from the distribution of PYQs across topics; actual exam weightage may vary slightly.

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3. Sample PYQ Analysis

3.1. Multiple‑Choice Questions

Q1. Which of the following is NOT a function of a Depository Participant?

• A) Maintaining demat accounts
• B) Settling trades on the exchange floor
• C) Providing depository services to investors
• D) Ensuring compliance with SEBI regulations

Answer: B – Trade settlement on the exchange floor is performed by the exchange and broker, not the DP.

Insight: The exam tests the clear demarcation between DP functions and other market participants.

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Q2. In the T+2 settlement cycle, the buyer must receive the securities no later than:

• A) End of the same trading day
• B) End of the next trading day
• C) End of the third trading day
• D) End of the fourth trading day

Answer: C – T+2 means settlement is completed by the end of the second day after the trade date (i.e., the third trading day).

Insight: Understanding the exact timeline is crucial for answering settlement‑related questions.

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3.2. Matching‑Column / Assertion‑Reason

Assertion (A): A demat account can be opened only after completing KYC.
Reason (R): KYC is mandated by the Prevention of Money Laundering Act (PMLA) and the SEBI (Depository) Regulations.

Answer: Both A and R are true, and R correctly explains A.

Insight: The exam checks not just factual recall but also the logical connection between regulations and operational requirements.

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4. Frequently Asked Questions (FAQ)

Q1. What is the difference between a Depository and a Depository Participant?

• Depository – An organization that holds securities in electronic form (e.g., NSDL, CDSL).
• Depository Participant (DP) – An intermediary registered with the depository that provides depository services to investors (e.g., banks, brokers).

Q2. How many days does a dematerialisation request typically take to get processed?

• Usually 7‑10 days from the date of request receipt, subject to document verification and depository’s workload.

Q3. Can a DP freeze a demat account, and under what circumstances?

• Yes. A DP may freeze an account on:
  • Regulatory instruction (e.g., SEBI order).
  • Client request for security reasons.
  • Non‑compliance with KYC or other regulatory norms.

Q4. What are the penalties for a failed settlement in a depository?

• The depository imposes penalty fees on the concerned participant, which may be passed on to the client. The exact amount is stipulated in the SEBI (Depository) Regulations and varies by the type of failure (e.g., missed deadline, incomplete instructions).

Q5. Which corporate action requires the highest level of communication from the depository?

• Scrip dividend – Requires detailed communication to investors about conversion ratios, tax implications, and the option to receive shares or cash.

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5. Tips for Cracking NISM Series 6 PYQs

• Create a Topic‑Wise Question Bank – Compile PYQs into separate sheets for each theme; this helps in quick revision.
• Focus on Definitions – 30‑40% of PYQs are direct definition‑based (e.g., “What is a Depository Participant?”).
• Practice with Timed Mock Tests – Simulate the 150‑minute exam environment; analyze mistakes immediately.
• Use Flowcharts – Draw process flow for settlement, KYC, and corporate action handling; visual memory aids retention.
• Stay Updated – Recent amendments (e.g., 2023 SEBI circular on cyber‑security for DPs) often appear as “statement‑based” questions.

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6. Call‑to‑Action

🚀 Ready to ace NISM Series 6?

• Download our free PYQ PDF (link below) and start practicing today.
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• Subscribe to our YouTube channel for video explanations of the toughest concepts.

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Don’t just prepare—prepare smartly. Your certification, and a successful career as a Depository Participant, start with the right practice.