NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments
Mr. Iyer buys 200 shares of an Indian company on the normal rolling settlement cycle in the cash segment on a Monday, with no intervening market holidays. Under the prevailing T+1 settlement cycle, when will the shares be delivered and payment settled?
The trade settles on Tuesday. Indian equity cash market trades follow a T+1 rolling settlement cycle, so settlement takes place one trading day after the trade day, provided no holidays intervene.
- AOn the same Monday itself
- BOn Tuesday, the next trading dayCorrect
- COn Wednesday, two trading days later
- DOn Thursday, three trading days later
Explanation
Equity cash market trades in India settle on a T+1 rolling basis, where T is the trade day. A Monday trade therefore settles on Tuesday if there are no holidays. T+2 and T+3 were older cycles, and same-day settlement is not the standard cycle.
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