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

A client places an order through the broker's internet trading platform. Which statement about the broker's obligation after the trade is executed is correct?

The broker must issue a contract note to the client within the prescribed time after execution, generally by the next working day, even for online trades. The exchange does not issue it, and it is not deferred to year end.

  1. AThe broker need not issue a contract note if the client has traded online
  2. BThe broker must issue a contract note to the client within the prescribed time after the tradeCorrect
  3. CThe exchange issues the contract note directly to the client
  4. DThe contract note is issued only at the end of the financial year

Explanation

Brokers must issue contract notes for trades executed for clients, including online trades, within the prescribed time, generally by the next working day. It is the broker's duty, not the exchange's, and it is not an annual document.

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