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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market

Anil is told that in India the trade settlement cycle for equity shares on exchanges is now T+1. His DP explains what this means. Which explanation is correct?

T+1 means the trade is settled on the next working day after the trade date, with securities and funds exchanged then. It is the rolling settlement cycle used for equity shares in India.

  1. ASettlement of a trade occurs on the next working day after the trade dayCorrect
  2. BSettlement occurs one hour after the trade
  3. CSettlement occurs on the first day of the following month
  4. DSettlement occurs one week after the trade day

Explanation

T+1 means the trade day plus one working day. Funds and securities are exchanged on that next working day. Other options misstate the period, which is not hours, weeks or months.

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