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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

A broker's client buys shares on Monday under the T+1 rolling settlement cycle in the cash segment. Assuming there are no holidays, on which day does the client's pay-in obligation settle and the securities get delivered?

With T+1 rolling settlement, a trade done on Monday settles on Tuesday, assuming no holidays intervene. Both the funds and securities obligations are completed on that next working day, not on the same day or two days later as under the older T+2 cycle.

  1. AMonday, the same day
  2. BTuesdayCorrect
  3. CWednesday
  4. DFriday

Explanation

Under T+1 rolling settlement, a trade done on day T settles on the next working day. A Monday trade therefore settles on Tuesday. Wednesday would apply to T+2, which is no longer the cycle. Same-day settlement is not the standard cycle.

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