Q1. [4] § 4.2.2. Debt Investment
"A contract note is a confirmation of trade on a particular day issued for and, on behalf of, a client by a registered broker of a stock exchange." Explain information required to be mentioned on the contract note issued by the stock broker.
Previously asked in CBSE board exam
2023 92 Q18
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer
A broker must issue a contract note to clients for all transactions in the prescribed form. The contract note must mention the following details:
- Broker's details — Name, address, SEBI Registration Number, dealing office address, telephone/fax number, and code number given by the Exchange.
- Trade details — Contract number, date of issue, settlement number, order number, order time, trade number, trade time, and time period for settlement.
- Client details — Name and code number of the client.
- Transaction details — Quantity and kind of security bought/sold, brokerage charged, purchase/sale rate.
- Taxes and charges — Service tax rates, Securities Transaction Tax, and any other charges levied.
- Stamp duty — Requisite stamps affixed or mention of consolidated stamp duty paid.
- Signature — Of the authorized signatory of the stock broker.
Source: Chapter 4, Section 4.1.2 – Stock Trading
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Explanation
- The examiner expects you to list the key items on a contract note — don't just describe what a contract note is (that's given in the question itself).
- Since it is 4 marks, 6–7 crisp points are ideal. Avoid vague language; use the exact terminology from the textbook (e.g., "Securities Transaction Tax," "SEBI Registration Number").
- Grouping details under bold headings (Broker's details, Trade details, etc.) makes your answer organized and easy to award marks.
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