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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. A public holiday falls on Tuesday, and Wednesday is a working day. Assuming no other holidays and that settlement days exclude holidays, on which day will the pay-in and pay-out for Monday's trade take place?

Settlement happens on Wednesday. Under T+1 rolling settlement only working days are counted, so the holiday on Tuesday is skipped, and Wednesday becomes the first business day after the Monday trade date for pay-in and pay-out.

  1. ATuesday
  2. BWednesdayCorrect
  3. CThursday
  4. DFriday

Explanation

T+1 counts working days only. Tuesday is a holiday, so the first working day after Monday's trade is Wednesday, and settlement occurs on Wednesday. Thursday would correspond to T+2, and Tuesday is not a settlement day.

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