Question

    What is the significance of the T+2 settlement cycle in

    the Indian capital market?
    A It refers to the time taken for a trade to settle after the trade date Correct Answer Incorrect Answer
    B It refers to the time period within which the stock exchange must disclose insider trading information Correct Answer Incorrect Answer
    C It refers to the time taken for a stock to reach its full potential value in the market Correct Answer Incorrect Answer
    D It refers to the time period within which companies must disclose their annual financial results Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The T+2 settlement cycle is a term used in the Indian capital market to refer to the time taken for a trade to settle after the trade date. In the T+2 settlement cycle, the settlement of trades takes place on the second business day after the trade date. The T+2 settlement cycle was introduced in India in 2003 to reduce the settlement risks and to align the Indian market with international standards. The settlement cycle is used to calculate the date on which the seller must deliver the securities and the buyer must make the payment for the securities. Hence, option A is correct.

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