n NISM Certifications
VII NISM Series VII
Medium

Clearing and settlement of trades takes place on a ________ basis.

Practice question from NISM Series VII Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Hourly

  2. Daily

    Correct answer

  3. C

    Weekly

  4. D

    Monthly

Why this is the answer

Clearing and settlement is a post-trading activity forming a core part of the equity trade lifecycle. Brokers report their transactions to the Clearing House at the end of each trading day, which then provides obligation reports. Brokers must settle money and securities obligations within the stipulated time to avoid penalties.

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