Rukul is a regular investor in the stock market. He follows the settlement cycle of ________ on a rolling settlement basis.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → T + 2 Days
Option (1) T + 2 Days — Correct. Under rolling settlement, each trade is settled a fixed number of days after its own trade date (T), instead of all trades being settled together on one weekly or fortnightly date. From 2003, the cycle has been T+2: the investor pays cash or delivers the shares on the pay-in day, and the exchange completes the deal on the T+2 day.
Option (2) T + 3 Days — Incorrect. The book gives two days after the trade date, not three.
Option (3) T + 24 Hours — Incorrect. The cycle in the book is counted in days, and it is two days, not one.
Option (4) T + 2 Hours — Incorrect. No settlement cycle is this short. Two hours is not even the end of the trading day.
Note 1: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. Note 2: The answer follows the pre-rationalised NCERT, which says the settlement cycle is T+2 on a rolling settlement basis from 1 April 2003. The market has changed since then. From January 2023, SEBI has moved all shares on Indian stock exchanges to T+1, so a trade is now settled one working day after the trade date. That makes Option (3), T + 24 Hours, the closest to today’s cycle. But the question is set from the book, and the book says T+2, so the answer is Option (1). The market moved to T+1 in 2023, but NTA’s paper is still on T+2. For the exam, follow the book.
NCERT (Pre-rationalised Edition): “Steps in the Trading and Settlement Procedure … 8. Cash is paid or securities are delivered on pay-in day, which is before the T+2 day as the deal has to be settled and finalised on the T+2 day. The settlement cycle is on T+2 day on a rolling settlement basis, w.e.f. 1 April 2003.” |