of all recognised Stock Exchanges in India
Contract notes and brokerage
We invite your attention to the bye-laws and rules framed by the Stock Exchange under the Securities Contracts (Regulation) Act, and the Rules thereunder which require that the member-brokers of the Stock Exchange should issue contract notes to their clients for the securities sold and purchased by them on behalf of the clients. We shall appreciate it if you could please issue necessary instructions to the member-brokers to invariably issue contract notes to the clients as required under the bye-laws of the Stock Exchange and advise the member-brokers that non-compliance of these instructions by member-brokers would be viewed seriously and would invite stringent action against them.
Furthermore, at present according to the bye-laws of some Stock Exchanges, it should be stated in the contract note that brokerage at rates not exceeding the official scale of brokerage fixed by the Exchange has been charged and allowed for in the price. It would be worthwhile to emphasise in this context that with a view to introduce transparency and also to encourage confidence and credibility among investors, it is necessary that the transaction price and brokerage are shown separately in the contract note. You are requested to please take necessary measures in this connection including addition of requisite details to existing bye-laws and rules and requlations if needed, and issue necessary instructions to the member-brokers in this regard and ensure that the instructions are followed scrupulously.