SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 49: Answer and Explanation

Question: 49

Which of the following is NOT true regarding settlement?

• A. Settlement may occur one trade day prior to the trade date (T-1).
• B. If the buyer or seller prefers to settle during other than regular-way, this special settlement is agreed to before the trade takes place.
• C. If the buyer and seller agree a cash trade, it may settle on the trade date (T).
• D. If the seller is not able to provide ownership by the time expected, the seller may request additional time to settle.

Correct Answer: A

Explanation:

A: Choice A is correct because trades do not settle prior to the date the sale is agreed to. Choices B, C, and D are incorrect because these are all true statements.