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Contract Notes (comprising a bought note and a sold note) are documents necessary for transferring the beneficial title of shares.
It is important to check stamping requirements and procedures under the relevant jurisdiction relating to Contract Notes.
Stamping procedures may require Contract Notes to be executed offline (i.e. e-signature is not accepted).
Significance of Contract Notes
- Contract notes are legal and are also documented on stamped paper. It contains the details of trades executed on the exchange.
- A contract note provides recourse, in case of a dispute arising out of transactions. It aids the arbitrators in the settlement.
- For investors, a Contract Note helps them verify the trades executed on their behalf by a broker, It also helps them understand the calculation of brokerage and other charges.
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