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

Which of the following best describes the pay-in of securities in a rolling settlement in the depository system?

Pay-in is the delivery of securities by the selling broker to the clearing corporation by the deadline, usually from the broker's pool account. Pay-out is the later release of securities to buying brokers; the issuer and buyer are not involved in pay-in.

  1. AThe clearing corporation returns securities to the seller
  2. BThe selling broker's securities are delivered to the clearing corporation by the pay-in deadline, from the broker's pool accountCorrect
  3. CThe issuer delivers new shares to the buyer
  4. DThe buyer delivers securities to the clearing corporation

Explanation

Pay-in is when the selling clearing member delivers securities to the clearing corporation, typically via transfer from the pool account within the deadline. Pay-out is the reverse for buyers.

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