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

An investor sells 100 shares on a Monday under the T+1 rolling settlement on the NSE cash segment, with no holidays in the week. The investor delivers the shares in the depository system on time. By when are the funds normally paid out to the clearing members as per the settlement schedule?

Funds are paid out on Tuesday, the next working day after the Monday trade, because the cash segment follows T+1 rolling settlement. Wednesday reflects the older T+2 cycle, and weekly Friday settlement is not applicable to rolling settlement.

  1. AOn Monday itself, the trade day
  2. BOn Tuesday, the next working day after the trade dayCorrect
  3. COn Wednesday, two working days after the trade day
  4. DOn Friday, the end of the trade week

Explanation

Under T+1 rolling settlement, the trade done on Monday (T) is settled on the next working day, Tuesday. Pay-in and pay-out occur on that settlement day. T+2 would be Wednesday, which is the older cycle, and weekly settlement on Friday is not used in rolling settlement.

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