)
The commodity derivatives market regulator, Forward Markets Commission (FMC), has proposed to make electronic contract notes (ECN) a part of know your client (KYC) documents. The FMC has sought public comment on the proposal by October 10.
A contract note is a confirmation of trade in equity shares completed on a particular day for, and on behalf of, a client. The broker must send the note to the client within 24 hours of the execution of the trade.
The FMC received requests from clients and members for this: It will be more convenient and time-saving for new clients. The matter was also discussed in a meeting on August 22 with managing directors and chief executive officers of exchanges. It was agreed to provide relief to new clients.
The FMC had allowed members to issue contract notes authenticated by digital signatures, provided the broker had obtained the digital signature certificate from the certifying authority.
The ECN, however, continued to remain optional for clients. It can be revoked by the client.
The FMC emphasised all ECNs sent through email shall be digitally signed and encrypted. If the clients do not wish to receive the notes in the electronic form, the member shall continue to send in the physical form.
