Podcast
Questions and Answers
Settlement in the bond market involves transferring ownership of assets between the buyer and seller.
Settlement in the bond market involves transferring ownership of assets between the buyer and seller.
True (A)
In South Africa, a T+2 settlement cycle for bonds means settlement occurs two business days after the trade date.
In South Africa, a T+2 settlement cycle for bonds means settlement occurs two business days after the trade date.
False (B)
An unregulated platform is used to ensure safe and efficient settlement of trades by providing a centralised platform for security and funds movement.
An unregulated platform is used to ensure safe and efficient settlement of trades by providing a centralised platform for security and funds movement.
False (B)
The settlement process is when the buyer delivers cash and the seller delivers bonds.
The settlement process is when the buyer delivers cash and the seller delivers bonds.
The settlement cycle refers to the time between the trade date and the date the transaction is finalized.
The settlement cycle refers to the time between the trade date and the date the transaction is finalized.
If a bond trade occurs on Monday, with a T+3 settlement, the settlement date will be the following Monday.
If a bond trade occurs on Monday, with a T+3 settlement, the settlement date will be the following Monday.
Settlement cycles are standardized across all countries to ensure uniformity in bond trading.
Settlement cycles are standardized across all countries to ensure uniformity in bond trading.
The primary purpose of a settlement system iis to eliminate counterparty risk in bond transactions.
The primary purpose of a settlement system iis to eliminate counterparty risk in bond transactions.
A quicker settlement cycle, such as T+1, would generally increase the operational risk for participants compared to a longer cycle like T+3.
A quicker settlement cycle, such as T+1, would generally increase the operational risk for participants compared to a longer cycle like T+3.
If a bond transaction settles, there can still be dispute around the price and value of the bond.
If a bond transaction settles, there can still be dispute around the price and value of the bond.
Flashcards
Settlement (Bonds)
Settlement (Bonds)
Transferring bond ownership from seller to buyer, and funds from buyer to seller.
Settlement Cycle
Settlement Cycle
The time between the trade date and the settlement date for bonds.
Strate's Role
Strate's Role
Ensures safe and efficient settlement of trades via a centralised platform for securities and funds movement.
Study Notes
- Settlement is the transfer of bond ownership from seller to buyer.
- In South Africa, the bond settlement cycle is T+3, meaning settlement occurs three business days after the trade date.
- Strate facilitates secure and efficient trade settlement via a centralised platform for securities and funds movement.
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