Context:
The Securities and Exchange Board of India (SEBI) has mandated the implementation of a common contract note featuring a single volume weighted average price (VWAP) for trades executed across exchanges. This directive came into effect on June 27, 2025, and is aimed at streamlining the post-trade reporting process for investors and brokers alike.
Key Highlights
Common Contract Note Introduced
- SEBI’s reform ensures that all trades executed across multiple stock exchanges (e.g., NSE, BSE) will be aggregated in a single contract note.
- This eliminates the current system where investors receive multiple contract notes for trades conducted on different exchanges.
The volume-weighted average price (VWAP)
- The volume-weighted average price (VWAP) is a technical analysis indicator used on intraday charts that resets at the start of every new trading session. It’s the average price a security has traded at throughout the day, based on both volume and price.
- The contract note will reflect a single VWAP per security, computed across all exchanges.
- This simplifies understanding of execution price, especially in high-frequency or algorithmic trades split across venues.
Benefits of the Reform
- Simplified compliance and reporting for brokers and back-office teams.
- Enhanced transparency and clarity for investors in terms of pricing and charges.
- Reduced paperwork and administrative burden for intermediaries.
