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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

A broker receives a client order to buy shares. Under exchange and SEBI norms, what must the broker do after the trade is executed regarding the contract note?

The broker must issue the contract note to the client within 24 hours of trade execution, in physical or electronic form. It is mandatory for every trade, regardless of value, and is not deferred until settlement payout or dependent on a client request.

  1. AIssue the contract note to the client within 24 hours of the execution of the tradeCorrect
  2. BIssue it only if the client requests it in writing
  3. CIssue it at the end of the settlement cycle after payout
  4. DIssue it only for trades above Rs 1 lakh

Explanation

Brokers must issue contract notes to clients within 24 hours of the execution of trades, whether in physical or electronic form. It is not optional, not dependent on a client request, and not linked to trade value or payout timing.

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