Chapter 11: NISM-XV Exam Prep
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Day 55: NISM-XV Module 7 — Ethics & Compliance
Achi research sirf numbers nahi — character bhi hai!
2 min read
📖 Raju RA Ka Temptation
Raju ek SEBI registered RA hai. Ek company ne ₹5 lakh offer kiye — "Hamare stock pe positive report likho, hum fee denge!"
Raju jaanta hai: Yeh illegal hai — SEBI fraudulent/misleading reports ko seriously leta hai. Jail + fine + license cancel!
Raju ne offer reject kiya. Kyunki integrity = career ka safeguard! ⚖️
Raju ek SEBI registered RA hai. Ek company ne ₹5 lakh offer kiye — "Hamare stock pe positive report likho, hum fee denge!"
Raju jaanta hai: Yeh illegal hai — SEBI fraudulent/misleading reports ko seriously leta hai. Jail + fine + license cancel!
Raju ne offer reject kiya. Kyunki integrity = career ka safeguard! ⚖️
Code of Conduct for Research Analysts
SEBI (RA) Regulations Schedule C ke under, RA ka code of conduct:
✅ Independence: Research objective aur conflict-of-interest free honi chahiye
✅ Integrity: Misleading, fraudulent, or manipulative content banned
✅ Fair dealing: Sab clients ke saath equal treatment
✅ Competence: Continuous learning, updated knowledge
✅ Confidentiality: Client information protect karo
✅ Disclosure: All conflicts of interest disclose karo honestly
✅ Independence: Research objective aur conflict-of-interest free honi chahiye
✅ Integrity: Misleading, fraudulent, or manipulative content banned
✅ Fair dealing: Sab clients ke saath equal treatment
✅ Competence: Continuous learning, updated knowledge
✅ Confidentiality: Client information protect karo
✅ Disclosure: All conflicts of interest disclose karo honestly
Prohibited Activities — Exam Important!
| Prohibited Activity | Why Illegal |
|---|---|
| Front Running | Client ke order se pehle apna order lagana — illegal profit! |
| Insider Trading | UPSI (Unpublished Price Sensitive Information) pe trade karna |
| Market Manipulation | Artificially price pump/dump karna |
| Churning | Unnecessary frequent trading to earn commissions |
| Misleading Research | Paid promotion as independent research |
Insider Trading — Exam Ka Favorite Topic!
UPSI = Unpublished Price Sensitive Information
Examples of UPSI:
• Quarterly results (before release)
• Mergers & Acquisitions news
• Major order wins/losses
• Change of key management
• Bankruptcy filing
SEBI (PIT) Regulations 2015 = Prohibition of Insider Trading rules!
Trading window closed period: Results se pehle 48 hours to results date!
Examples of UPSI:
• Quarterly results (before release)
• Mergers & Acquisitions news
• Major order wins/losses
• Change of key management
• Bankruptcy filing
SEBI (PIT) Regulations 2015 = Prohibition of Insider Trading rules!
Trading window closed period: Results se pehle 48 hours to results date!
KYC aur AML Requirements
KYC = Know Your Customer (PMLA 2002)
Every broker/DP/RA ko client ka:
• PAN card (mandatory for stock trading!)
• Address proof (Aadhar, passport, driving license)
• Bank details
• Risk profile
Yeh requirements PMLA (Prevention of Money Laundering Act) 2002 ke under mandatory hain!
Risk-based KYC: High-risk clients = more documentation needed.
Every broker/DP/RA ko client ka:
• PAN card (mandatory for stock trading!)
• Address proof (Aadhar, passport, driving license)
• Bank details
• Risk profile
Yeh requirements PMLA (Prevention of Money Laundering Act) 2002 ke under mandatory hain!
Risk-based KYC: High-risk clients = more documentation needed.
🎯 Takeaway:
RA Code of Conduct: Independence, integrity, fair dealing, competence. Front running, insider trading, market manipulation = prohibited. UPSI = unpublished price sensitive info = cannot trade on. KYC = mandatory for all! Kal — NISM Mock Exam Practice!
RA Code of Conduct: Independence, integrity, fair dealing, competence. Front running, insider trading, market manipulation = prohibited. UPSI = unpublished price sensitive info = cannot trade on. KYC = mandatory for all! Kal — NISM Mock Exam Practice!