Stock Exchanges Set to Launch Common Contract Notes This Quarter After System Tests

Bourses and Brokers Coordinate to Introduce Standardised Contract Notes with Weighted Average Price

Indian stock exchanges, in coordination with clearing corporations and broking firms, are in the advanced stages of testing a common contract note format that includes the Weighted Average Price (WAP) across multiple exchanges. The initiative, which has faced delays due to participant readiness, is now progressing swiftly, with testing scheduled between April 7 and April 23, and a full rollout targeted within the current quarter (Q1 FY26).

The contract note serves as a legally binding proof of trade execution and is crucial for investor protection, especially in cases involving broker defaults. A common contract note will standardise how trade information is displayed, enhancing clarity, transparency, and facilitating easier dispute resolution.

Highlights:

• Testing of common contract notes is underway from April 7–23.

• Rollout expected in Q1 FY26 subject to successful mock runs.

• Format to include WAP across exchanges and all trade-related charges.

Simplified Trade Reporting: Common Note Format to Include Unified WAP and Transaction Details

The upcoming contract note format will deliver a unified view of trades executed across exchanges such as NSE and BSE, including a single WAP for all transactions involving a particular security. This will help investors understand the average buy/sell price, streamlining record-keeping and tax reporting.

While exchange-specific transaction details will still be made available in annexures, the WAP will be calculated by dividing the cumulative traded value of a stock across exchanges by the total quantity transacted. Investors will benefit from:

• A consolidated summary of trades.

• Unified transaction charges.

• Clear demarcation of each order and trade with time stamps.

• Breakdown of securities transacted, prices, charges, and net receivables/payables.

The notes will apply to all client categories trading in equity and derivatives segments, but only for secondary market transactions.

Highlights:

• WAP provides a simplified calculation of average trade prices across exchanges.

• Notes to show combined exchange transaction charges, while exchange-wise prices appear in annexures.

• Applicable for all clients, but limited to secondary market dealings.

Regulatory and Market Infrastructure Synchronisation Gains Momentum

As per circulars issued by NSE Clearing Ltd (NCL) and BSE’s ICCL, a dedicated environment has been created to facilitate interface testing. The success of these mock runs is expected to determine the feasibility of full-scale implementation within the quarter.

People with knowledge of the matter confirmed that all relevant entities, including clearing corporations, depositories, and broking intermediaries, are engaged in the testing ecosystem. The system aims to ensure uniformity, faster reconciliations, and reduced client confusion, all in line with investor-centric reforms introduced by SEBI.

This common note proposal has been under deliberation for several years, primarily stalled due to varying levels of technology integration among brokers. With greater industry coordination and digitisation across broking platforms, the project is now close to completion.

Highlights:

• NSE and BSE clearing arms lead testing efforts.

• Interface testing involves brokers, clearing arms, and infrastructure institutions.

• Delays in implementation previously attributed to participant readiness gaps.