Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer
Pay-out refers to the process by which the stock exchange makes payment of funds and delivery of securities to the trading members (brokers) after a trade is settled. Investors should ensure they receive payments/deliveries from their broker within one working day of the payout date.
Source: Stock Trading, Chapter 4
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Explanation
- The examiner expects a short definition (1–2 marks) focusing on what payout means in the context of stock market settlement.
- Key point to mention: it involves both funds and securities being transferred, and the one working day timeframe is a specific detail examiners look for.
- Do not confuse pay-out with pay-in; pay-in is when the investor delivers funds/securities to the broker, while pay-out is when the broker delivers back to the investor after settlement.