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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 Tuesday (T day) in the rolling settlement cycle that currently applies to equity cash market trades on Indian exchanges with T+1 settlement. When will the pay-in and pay-out of securities and funds for this trade normally occur?

The trade settles on Wednesday, the next working day. Indian equity cash market follows T+1 rolling settlement, so pay-in and pay-out of funds and securities occur one working day after the trade day. T+2 was the earlier cycle and no longer applies.

  1. AOn the next working day, Wednesday, which is T+1Correct
  2. BOn Thursday, which is T+2
  3. COn Friday, which is T+3
  4. DOn the same day, Tuesday

Explanation

Equity cash market trades follow T+1 rolling settlement, meaning settlement happens on the first working day after the trade day. A Tuesday trade therefore settles on Wednesday, if it is a business day. T+2 was the earlier cycle, so Thursday is wrong.

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