Arrange the following steps in trading and settlement procedure in correct order:
A. Broker matches the share and best price available online.
B. Investor places an order with the broker to buy or sell shares.
C. Broker issues a contract note
D. Broker issues trade confirmation slip
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → B, A, D, C
(B) Investor places an order with the broker to buy or sell shares. — first. Trading begins with the investor’s instruction. The broker cannot act until the order is placed.
(A) Broker matches the share and best price available online. — second. The broker enters the order online and looks for the matching share at the best price. When a match is found, the order is executed electronically.
(D) Broker issues trade confirmation slip — third. As soon as the order is executed, the broker gives the investor a trade confirmation slip.
(C) Broker issues a contract note — fourth. Within 24 hours of the trade the broker issues the contract note, with full details of the deal and the brokerage.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. NCERT (Pre-rationalised Edition): “Steps in the Trading and Settlement Procedure … 3. The investor then places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and the price at which the shares should be bought or sold. The broker will then go ahead with the deal at the above mentioned price or the best price available. An order confirmation slip is issued to the investor by the broker. |