NISM Series XII: Securities Markets Foundation examination

The broad introductory examination: how the securities markets work, what is traded in them, and the first steps of financial planning.

Examination facts

Source: the page of this examination on nism.ac.in. Fees and rules are revised from time to time; the page is the authority.

Who takes it

Series XII is the entry-level examination among NISM's certifications. Its page describes the knowledge expected in terms such as the schemes and products in the mutual fund and derivatives markets in India and the steps in the financial planning process. It suits students of commerce and management, new employees in broking, banking and fund houses who need a common grounding, and investors who want to understand the market they put money into. It is a sensible first examination before a specialised one.

What the paper covers

We did not copy the unit list of this module; the current curriculum and test objectives are on NISM's page. Our own questions for this examination are grouped under these subjects, which follow the areas the page describes:

• Securities markets: what securities are, the role of the market, the regulator and intermediaries.
• Primary market: how companies raise money through public issues and other routes.
• Secondary market: stock exchanges, trading, clearing and settlement, dematerialisation.
• Debt securities: bonds, coupon, yield, and the relation between price and interest rates.
• Mutual funds: structure, scheme types, NAV.
• Derivatives: futures and options in outline.
• Corporate actions: dividend, bonus, split, rights.
• Financial planning: goals, risk profile, asset allocation.

How to prepare for this paper

The pass mark is 60%, higher than for the mutual fund papers, but there is no negative marking. The difficulty is breadth: the paper touches every part of the market lightly.

• Build a one-page map of the market: who issues, who invests, who intermediates, who regulates, and where each instrument trades.
• Learn the vocabulary. Many questions are definitions. Our glossary has the common terms.
• Understand, do not memorise, price and yield. When interest rates rise, prices of existing bonds fall. This single idea answers several questions.
• Practise the simple calculations: current yield, NAV, bonus and split adjustments, basic option payoff. See the formula sheet.
• Attempt every question, since nothing is deducted for a wrong answer.

Practice questions

We have written 30 questions of our own for this examination, each with an explanation. Read all 30 with answers Take them as a test

After passing

The certificate validity shown is three years. After the foundation, candidates usually move to the examination their work needs: Mutual Fund Distributors for distribution, Equity Derivatives for the derivatives segment, or Research Analyst. See which exam.

Questions candidates ask

Other examinations

Guides

An independent practice site. NISM is the National Institute of Securities Markets. This site is not connected with, approved by or paid by NISM or SEBI, and uses none of their logos. The questions are our own; none is taken from NISM's question bank, workbooks or mock tests, and a score here does not predict a result. Examination facts were read on nism.ac.in on 12 November 2026 and can change: check the page of your module on nism.ac.in before you pay or prepare. Nothing here is investment advice.