SEBI Mandates Unified Contract Note With Single VWAP

To make trading easier for institutional investors and market participants, SEBI has made it mandatory to issue a Common Contract Note with a single volume weighted average price, starting June 27. A contract note refers to a legal document that presents the summary of all the trades executed during a trading day.

Based on the representation received from market participants, the regulator decided to provide uniformity in post-trade communication.

Accordingly, in collaboration with concerned stakeholders, a single consolidated contract note mechanism with uniform VWAP was conceptualized and developed for multi-venue trading, SEBI said in a statement.

"The reform will simplify the post-trade reporting process by consolidating trades executed across multiple exchanges into a single, harmonized document, eliminating the need to process multiple contract notes," it said.

The move aims at increasing cost efficiency, reducing compliance burden for market participants and ensuring consistent trade reporting aligned with the CC interoperability framework.

The erstwhile system required separate trade confirmations for each exchange resulting in complicated reconciliation, settlement, and regulatory compliance.