What is a contract note?

A contract note is an essential document in the trading world, serving as a legally binding record of transactions executed on the stock exchange. It provides a detailed summary of the trades conducted by an investor through their broker, capturing all pertinent information, such as the number of shares bought or sold, the price at which the transactions were executed, and the total transaction value. This document is crucial for maintaining transparency between the investor and the broker, ensuring that all trades are accurately recorded and verified.

A contract note typically includes several key details: the name of the investor, the date and time of the transaction, the description of the securities involved, the quantity traded, and the brokerage fees applied. Additionally, it outlines various charges associated with the trade, including the Securities Transaction Tax (STT), Goods and Services Tax (GST), stamp duty, and any other regulatory fees. These charges are clearly itemised, providing the investor with a comprehensive view of the costs incurred during the trading process.

In India, the Securities and Exchange Board of India (SEBI) mandates that brokers issue a contract note to their clients for every transaction conducted. This document must be delivered within 24 hours of the trade execution, either in physical form or electronically. The contract note not only serves as a proof of the transaction but also plays a vital role in resolving any disputes that may arise between the broker and the investor regarding the trade details.

For investors trading through platforms like Share India, the contract note acts as a critical reference for verifying the accuracy of their trades and understanding the costs involved. By carefully reviewing the contract note, investors can ensure that their trading activities align with their expectations and financial goals. Share India emphasises the importance of this document in maintaining trust and transparency with its clients, reinforcing its commitment to providing a secure and reliable trading experience.