Skip to content

NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement

Rohan sold shares on Monday under a T+1 rolling settlement. By when must the securities normally be available in the clearing member's pool account for pay-in, assuming no holidays?

Under a T+1 rolling settlement, a Monday trade settles on Tuesday, so securities must reach the clearing member's pool account before Tuesday's pay-in deadline. Wednesday would correspond to the older T+2 cycle and is therefore not correct for a T+1 trade.

  1. ABefore the pay-in deadline on Tuesday, the settlement dayCorrect
  2. BBefore the pay-in deadline on Wednesday
  3. CBefore the pay-in deadline on Monday itself, after the trade
  4. DBefore the pay-in deadline on the following Friday

Explanation

Under T+1, the settlement happens on the next working day after trade. Trade on Monday means pay-in and pay-out occur on Tuesday. Wednesday would be T+2, which is the older cycle.

Did you get it right without looking?

One question tells you little. A timed set on Functions of Depository Participant - Trading and Settlement shows your real accuracy, how long you take and where you lose marks.

Practise Functions of Depository Participant - Trading and SettlementFree diagnostic mock

More Functions of Depository Participant - Trading and Settlement questions