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

Mr. Iyer buys shares through his broker in the equity cash market on a Monday under the T+1 rolling settlement, with no holidays that week. On which day is the pay-in and pay-out for this trade due?

The trade settles on Tuesday. Under the T+1 rolling settlement, pay-in and pay-out take place on the first working day after the trade day, so a Monday trade with no intervening holidays is settled the next day.

  1. ATuesdayCorrect
  2. BWednesday
  3. CThursday
  4. DFriday

Explanation

Under T+1 settlement, the obligations are settled on the next working day after the trade day. A Monday trade therefore settles on Tuesday. Wednesday or later would correspond to T+2 or longer cycles.

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