NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Clearing Process
A broker's client buys shares on Monday under a T+1 rolling settlement cycle with no holidays. On which day is the pay-in of funds and securities for this trade due?
The pay-in is due on Tuesday. Under a T+1 rolling settlement, trades are settled one working day after the trade date, so a Monday trade settles on Tuesday. Wednesday would be correct only for the earlier T+2 cycle, which no longer applies here.
- ATuesdayCorrect
- BMonday
- CWednesday
- DFriday
Explanation
Under T+1 settlement, obligations are settled one working day after the trade day. A Monday trade therefore settles on Tuesday. Wednesday would apply under T+2, which is the older cycle and is wrong here.
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