Three of the following are details contained in the contract note issued by the broker. Identify the odd one out.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Residential status (Indian/NRI)
Option (1) Number of shares bought or sold — A detail of the contract note. The broker issues the contract note within 24 hours of the trade. It records how many shares were bought or sold.
Option (2) Residential status (Indian/NRI) — Not a detail of the contract note. The investor gives this to the broker with the client registration form, before placing any order. It describes the investor, and no deal is involved.
Option (3) Brokerage charges — A detail of the contract note. The note shows the brokerage charged on the deal.
Option (4) Date and time of the deal — A detail of the contract note. The note records when the deal was struck, along with the price.
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. He has also to provide certain other details and information. These include: “Steps in the Trading and Settlement Procedure … 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. …” |