New to stock markets? Sebi’s certification exam is your first step in investing
Earlier this month, the Securities and Exchange Board of India (Sebi) launched a certification exam for retail investors. This free online exam tests the knowledge of individuals new to the securities market.
Developed in collaboration with the National Institute of Securities Market (NISM), the apex body responsible for giving certifications in the securities market, the certification is voluntary and aims to empower individuals with essential knowledge about savings and investment.
In April, Mint reported that stock exchanges had proposed two frameworks to curb retail participation in futures & options (F&O) trading. One of the proposals suggested that investors take an exam to become aware of the risks in derivatives trading. While these proposals are still under review, the investor certification exam has been introduced as a voluntary test to improve financial literacy.
As per Sebi, this initiative seeks to empower individuals with essential knowledge about basic concepts of savings and investment. “This online exam will help enhance investors' understanding of the investment process and the associated risks in the securities market and thus promote an efficient approach to investment aligned with the risk appetite of the investor," the regulator said in a statement.
The author appeared for the exam to understand what it is all about and what can be expected from it.
The exam consists of 50 multiple choice questions, carrying one mark each, and has to be completed within 60 minutes.
Questions broadly cover:
The last five questions quiz the candidate on some behavioural aspects of investing through hypothetical situations and what should be the right approach towards these situations.
For instance, say X invests
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