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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Operational Aspects of Investment Management

Meera Iyer, a client of an investment adviser, buys shares on a Monday trading day under the rolling settlement cycle currently followed in Indian equity markets, which is T+1. Assuming no holidays, by when should she expect the shares to be credited to her demat account?

She should expect the credit on Tuesday, the next trading day. Under the T+1 rolling settlement cycle, trades are settled one trading day after execution, so a Monday purchase with no holidays settles on Tuesday.

  1. AThe same day, Monday
  2. BThe next trading day, TuesdayCorrect
  3. CWednesday
  4. DFriday

Explanation

Under T+1 rolling settlement, a trade done on day T is settled on the next trading day. With no holidays, a Monday trade is settled on Tuesday. Same-day credit is not the norm. Wednesday would correspond to T+2, the earlier cycle, and Friday to a weekly cycle.

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