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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Other Services Provided by Brokers

A broker sends a client a contract note after executing trades. Which of the following is a correct requirement regarding contract notes?

A contract note must be issued in the prescribed format within 24 hours of trade execution. It must show brokerage and statutory charges separately. It is required for every trade regardless of value, and a delay of up to a month is not permitted.

  1. AThe contract note must be issued within 24 hours of execution of the trades and be in the prescribed formCorrect
  2. BIt may be issued any time within a month of the trade
  3. CIt is needed only when a trade value exceeds ₹10 lakh
  4. DIt need not mention brokerage and statutory charges

Explanation

Brokers must issue contract notes to clients in the prescribed format within 24 hours of the execution of trades. It must show brokerage, taxes and other charges separately. It is not optional based on trade value, and a month's delay is not permitted.

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