Match List-I (documents in the trading procedure) with List-II (their description):
| List-I | List-II | ||
|---|---|---|---|
| (A) | Order confirmation slip | (I) | Legally enforceable document that helps to settle disputes between the investor and the broker |
| (B) | Trade confirmation slip | (II) | Signed by the investor, along with an agreement, before any buy or sell instruction is given |
| (C) | Contract note | (III) | Issued once the deal is executed electronically at the price mentioned |
| (D) | Client registration form | (IV) | Issued after the investor gives clear instructions on the number of shares and the price |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A)-(IV), (B)-(III), (C)-(I), (D)-(II)
| List-I | List-II | Reason |
|---|---|---|
| (A) Order confirmation slip | (IV) Issued after the investor gives clear instructions on the number of shares and the price | Placing an order means giving clear instructions on the number of shares and the price. The broker then issues an order confirmation slip. |
| (B) Trade confirmation slip | (III) Issued once the deal is executed electronically at the price mentioned | When the shares can be bought or sold at the price mentioned, the order is executed electronically. The broker then issues a trade confirmation slip. |
| (C) Contract note | (I) Legally enforceable document that helps to settle disputes between the investor and the broker | The contract note is issued within 24 hours of the trade. It is legally enforceable and helps settle disputes or claims. |
| (D) Client registration form | (II) Signed by the investor, along with an agreement, before any buy or sell instruction is given | The investor signs it, with the broker-client agreement, before placing any order to buy or sell. |
NCERT (Pre-rationalised Edition): “Steps in the Trading and Settlement Procedure … 1. If an investor wishes to buy or sell any security he has to first approach a registered broker or sub-broker and enter into an agreement with him. The investor has to sign a broker-client agreement and a client registration form before placing an order to buy or sell securities. …” “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.” “5. When the shares can be bought or sold at the price mentioned, it will be communicated to the broker’s terminal and the order will be executed electronically. The broker will issue a trade confirmation slip to the investor.” “6. After the trade has been executed, within 24 hours the broker issues a Contract Note. This note contains details of the number of shares bought or sold, the price, the date and time of deal, and the brokerage charges. This is an important document as it is legally enforceable and helps to settle disputes/claims between the investor and the broker. …” |