Electronic Contract Note (ECN)

An electronic contract note (ECN) is the digitally signed legal record of a trade that a stockbroker delivers to a client by email, under the SEBI and exchange framework that permits paperless contract notes. It is the same instrument as the traditional contract note , the binding confirmation of trades executed for a client on a given day, issued in electronic form with a digital signature in place of a physical one.

The contract note is one of the oldest and most rigorously regulated documents in the Indian securities market. It is the primary evidentiary record of a trade: it states the order and trade numbers, the price, the quantity, every charge, and the net settlement obligation. Its electronic form is not a convenience the broker adopted on its own. SEBI built the ECN framework through a sequence of circulars between 2000 and 2011, each adding conditions for digital signing, encryption, delivery logs, and the handling of bounced email, so that an emailed contract note carries the same legal weight as a printed one.

This article covers what a contract note is and why it binds, the SEBI circulars that established the ECN framework, the mandatory contents and the T+1 issuance timeline, how the electronic form differs from the physical one, and how a Zerodha client accesses it. The Zerodha-specific download flow and the day-to-day mechanics are set out in the companion entry on Console contract notes ; this article is the framework-level reference.

What a contract note is

A contract note is a legally binding document issued by a stockbroker to a client confirming the details of trades executed during a trading session on a specific date. It is generated for every trading day on which at least one order was executed, and it constitutes a contract between the broker and the client.

Its legal character is settled. The contract note records the terms on which the broker bought or sold securities as the client’s agent, and it is admissible as the primary record of those terms. In a dispute over whether a trade was authorised, or executed at the stated price, the contract note, with its exchange-assigned trade number, is the document both sides and the exchange reconcile against. The exchange holds an independent record of the same trade number, so the contract note can be corroborated rather than taken on the broker’s word alone.

The obligation to issue it sits in the SEBI (Stock Brokers) Regulations, 1992 . Schedule II, the Code of Conduct, places a duty on the broker to promptly inform the client of the execution of an order, and the regulations require the broker to issue a contract note in the format the exchange specifies. Section 15F of the SEBI Act, 1992 prescribes a penalty where a registered stockbroker fails to issue contract notes in the specified form and manner. The contract note is therefore not optional and not discretionary in its content.

The ECN framework

The shift from physical to electronic contract notes was built in stages, each through a SEBI circular that tightened the conditions.

SEBI first permitted electronic issuance and then, in circular MRD/DoP/SE/Cir-20/2005, dated 8 September 2005, “Electronic issuance of contract notes, additional conditions”, set out the operating rules that still define the framework. That circular requires that an ECN be issued only to a client who has explicitly consented, through the member-client or tripartite agreement or a separate letter. It requires that every ECN be digitally signed, encrypted, and non-tamperable, and compliant with the Information Technology Act, 2000 . It requires the broker to maintain a log report as proof of delivery, to record undelivered, rejected, or bounced email, and to configure mail systems so that bounce notifications are received in time. It states that non-receipt of a bounce notification amounts to delivery. Where a client has not opted for electronic delivery, or where an ECN bounces, the broker must send a physical contract note and keep proof of delivery. The broker must also publish the ECN on a secured website, giving each client a unique login to view, save, or print the note. The circular was issued under Section 11(1) of the SEBI Act, 1992.

SEBI then consolidated these requirements in circular CIR/MIRSD/16/2011, dated 22 August 2011, which specifies the minimum fields, the delivery standards, and the retention obligations for electronic contract notes, and confirms that a broker may issue contract notes exclusively by email where the client has given written consent. Later circulars in the same line, MIRSD/SE/CIR-21/2011 dated 5 October 2011, CIR/MIRSD/13/2013 dated 26 December 2013, CIR/MIRSD/64/2016 dated 12 July 2016, and CIR/MIRSD/66/2016 dated 21 July 2016, refined the operational detail and are carried forward in SEBI’s master circular for stockbrokers.

The legal validity of the digital signature itself comes from the Information Technology Act, 2000 , which gives legal effect to a document signed with a valid digital signature certificate issued by a certifying authority licensed by the Controller of Certifying Authorities. Zerodha uses a Class 3 digital signature certificate to sign all its electronic contract notes, issued by a recognised Indian certifying authority.

Mandatory contents

A contract note for equity or futures and options trades is built from a fixed set of sections, the same whether issued by Zerodha or any other member.

The header carries the broker’s name, SEBI registration number, and exchange membership codes, and the client’s name, client code, PAN , and registered address, the trade date, and a unique sequential contract note number.

The trade-details table lists every executed trade as a row. Each row carries the order number assigned by the broker, the trade number assigned by the exchange, the order and trade timestamps, the security or contract description, the buy or sell direction, the quantity, the trade price, the brokerage per unit, the net rate, and the closing rate used for mark-to-market reference.

The charge summary aggregates the day’s costs: the gross value of trades on each side, the brokerage , the Securities Transaction Tax , stamp duty, exchange transaction charges, SEBI turnover fees , and GST on brokerage and exchange charges. The composition of these levies is set out in the entry on STT and CTT at Zerodha . The summary ends in the net amount payable or receivable, which is the settlement obligation for the day.

The settlement section carries the settlement number, the settlement type, the pay-in date by which the client must pay for purchases, and the pay-out date on which sale proceeds are expected. These tie into the T+1 settlement cycle .

The document closes with the digital signature block: the digital signature of the broker’s authorised signatory, the timestamp, and the certifying authority, verifiable in any PDF reader that supports signature validation.

Issuance timeline

The contract note must be issued within 24 hours of trade execution, by the close of the next trading day. This is the T+1 issuance standard. The note is emailed to the client’s registered address within that window, carrying the digital signature and timestamp that fix when it was signed.

The 24-hour window also governs disputes. SEBI and exchange rules require a client to raise any objection to a contract note within 24 hours of receipt, or by the close of the next trading day. Failure to object within that period is deemed acceptance of the terms. The window is strict, which is the practical reason a client should read contract notes promptly rather than at the end of a financial year.

Issuance is distinct from settlement. The contract note is issued at T+1; the funds and securities for an equity-delivery trade settle on the T+1 settlement cycle , and the settlement debits and credits then appear on the Console funds statement under the same settlement number printed on the contract note. A mismatch between the net amount on the contract note and the ledger entry for the same settlement number usually signals a later adjustment, such as an auction settlement, and is a query for broker support.

How it differs from a physical contract note

The electronic and physical contract notes carry the same information and the same legal weight; the difference is in form, signature, and the conditions for use.

A physical contract note is printed and physically signed by the broker’s authorised signatory, then delivered to the client. An electronic contract note is delivered by email with a digital signature, valid under the Information Technology Act, 2000 , with no paper involved. Under SEBI’s framework a broker may move entirely to email, dispensing with paper, only where the client has consented in writing and the email is digitally signed and encrypted. A physical note remains mandatory in two situations: where the client has not opted for electronic delivery, and where an ECN bounces or is not delivered, in which case the broker must send a physical copy and keep proof of delivery.

Zerodha operates entirely on a paperless basis, with all clients consenting to electronic delivery at account opening, as recorded in the account opening kit and summarised in the Most Important Terms and Conditions . The consent and the risk acknowledgement at account opening, covered in the Risk Disclosure Document , are what permit the broker to deliver every contract note by email.

To verify the signature on an emailed contract note, a client opens the PDF in a reader that supports signature validation, checks that the signature panel shows a valid certificate chain, confirms the certificate is issued to the broker by a recognised Indian certifying authority, and confirms the signing timestamp falls within 24 hours of the trade date. A red mark or a “document has been modified” warning means the file has been altered and should be re-downloaded.

How a Zerodha client accesses it

A Zerodha client receives the contract note in two ways. It is emailed automatically to the registered email address within 24 hours of trade execution, per SEBI requirements. It is also archived in Zerodha Console under Reports, then Contract notes, available date by date as one PDF per trading day per exchange segment.

Because a single trading day can produce trades across more than one segment, NSE equity, BSE equity, NSE F&O, NSE currency, BSE currency, and MCX commodity, Zerodha generates a separate contract note for each segment-exchange combination on days when trades occur there. A client looking for a note that appears in the Console tradebook but not in the contract notes list has usually set the segment filter to the wrong segment. SEBI requires brokers to retain contract notes for five years, and Console mirrors this, keeping them accessible online for five financial years. A client who needs a copy beyond that window should download and archive contract notes annually, alongside the Console tradebook and the Console Tax P&L statement , and a client who cannot find a note can follow the procedure to request a duplicate contract note from Zerodha .

The full Zerodha-specific download steps, segment-filter handling, and common discrepancies are set out in Console contract notes .

See also

• Console contract notes
• Contract note
• STT and CTT at Zerodha
• Zerodha brokerage structure
• Securities Transaction Tax
• SEBI turnover fees
• Risk Disclosure Document (RDD)
• Most Important Terms and Conditions (MITC)
• Account opening kit (Zerodha)
• SEBI (Stock Brokers) Regulations, 1992
• Information Technology Act, 2000
• T+1 settlement cycle
• Console funds statement
• Console tradebook
• Console Tax P&L statement
• Quarterly running account settlement
• Futures and options
• Zerodha account opening charges
• Exchange transaction charges
• How to request a duplicate contract note from Zerodha
• Investor grievance escalation matrix
• SEBI SCORES
• SEBI
• SEBI Investment Management Department
• Zerodha
• Zerodha Console
• Kite (Zerodha)
• Zerodha Broking Limited
• National Stock Exchange
• Bombay Stock Exchange
• NSE Clearing

External references

• SEBI circular: Electronic issuance of contract notes, additional conditions
• SEBI circulars
• NSE India member circulars
• Zerodha support: contract notes
• Controller of Certifying Authorities

References

1. SEBI Circular MRD/DoP/SE/Cir-20/2005, dated 8 September 2005, “Electronic issuance of contract notes, additional conditions”.
2. SEBI Circular CIR/MIRSD/16/2011, dated 22 August 2011, electronic contract notes: format, delivery, and retention.
3. SEBI (Stock Brokers) Regulations, 1992, Schedule II Code of Conduct, and the contract note issuance obligation; SEBI Act, 1992, Section 15F penalty.
4. Information Technology Act, 2000, on the legal validity of documents signed with a digital signature certificate.
5. Zerodha Support, “Where can I find my contract notes?”, support.zerodha.com.