Multiple choice

Directions: Choose the correct option for the given question.

Which of the following has replaced the Budla system in India?

  1. Rolling settlement

  2. Trading in equity derivatives

  3. Depository system

  4. Online trading
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A Correct answer
Explanation

The Badla system was a carry-forward facility used in Indian stock markets that allowed investors to carry forward their positions to the next settlement cycle. After the Ketan Parekh scam in 2001, SEBI replaced the Badla system with rolling settlement to ensure greater transparency and reduce speculative risks. Rolling settlement means trades must be settled within a fixed period (T+2 currently) without carry-forward options.

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