Question

Identify the correct sequence of trading settlement procedure:
(A) The investor has to sign a broker client agreement.
(B) The investor has to open a ’Demat’ Account.
(C) An order confirmation slip is issued to the investor by the broker.
(D) The broker will then go online and connect to the main stock exchange.
Choose the correct answer from the options given below:

• A. (A), (B), (C), (D)
• B. (A), (C), (B), (D)
• C. (B), (A), (D), (C)
• D. (C), (B), (D), (A)

Answer 1

The Correct Option is A

The standard procedure for stock trading settlement comprises the subsequent stages:

1. Execution of a broker client agreement by the investor. This formalizes the relationship and binds the investor to the brokerage's terms and conditions.
2. Establishment of a Demat account by the investor. This electronic account is essential for holding shares and streamlining trading without physical certificates.
3. Issuance of an order confirmation slip by the broker to the investor. This slip serves as confirmation of the investor's initiated trade order.
4. Broker's online connection to the main stock exchange for trade execution. The broker finalizes the transaction by interfacing with the exchange.

The delineated sequence is accordingly represented as (A), (B), (C), (D).