Question

____________ is a legally enforceable document issued by the broker to the investor within 24 hours of executing trade which helps to settle disputes/claims between the investor and the broker.

• A. Contract note
• B. Order confirmation slip
• C. Unique order code
• D. Client registration form

Hint:

Think of the paper that the broker gives after the trade is done. It is a legal proof of the trade details.

Answer 1

The Correct Option is A

Step 1: Recall the trading steps:
After an investor places an order, the broker executes the trade on the exchange. The broker then gives the investor a document within 24 hours of the trade.
This document is legally enforceable. It records the details of the trade, so it settles any dispute or claim between the investor and the broker.

Step 2: Check option (A) Contract note:
A contract note is issued by the broker within 24 hours of executing the trade. It shows the trade details, such as the securities, price, quantity and brokerage.
Being legally enforceable, it serves as proof of the trade. This fits every clue, so (A) is right.

Step 3: Check option (B) Order confirmation slip:
An order confirmation slip is given soon after the order is placed and executed, to confirm the order details. It is not the legal document issued within 24 hours of the trade.
So (B) is wrong.

Step 4: Check option (C) Unique order code:
A unique order code is a number given to each order by the exchange system so that the order can be traced. It is a code, not a document that settles claims.
So (C) is wrong.

Step 5: Check option (D) Client registration form:
This form is filled once when the investor opens an account with the broker, before any trade. It has no link with a trade that has just been executed.
So (D) is wrong.

Final Answer:
The document is the contract note, option (A).