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What Is Electronic Contract Note

  • Auther Image por DCIC
  • febrero 27, 2022
  • Sin categoría
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Electronic Contract Note: A Comprehensive Guide

If you are someone who has been active in the stock market, you may have come across the term Electronic Contract Note (ECN) at some point. But what exactly is an ECN, and why is it essential?

In simple terms, an ECN is an electronic document that serves as proof of a transaction taking place between a broker and a client. It contains important details such as the date of the transaction, the price at which the stock was bought/sold, and the quantity of shares traded.

Why is an ECN important?

An ECN serves as proof of a transaction, which means that it provides legal validity to the trade. It also serves as an official record of the transaction, which can be used for tax purposes, audit purposes, and as evidence in case of a dispute.

Prior to the advent of ECNs, these records were maintained manually, which made the process time-consuming and error-prone. With the introduction of ECNs, the entire process of recording and maintaining transaction records has become much simpler, faster, and more accurate.

How does an ECN work?

When a trade is executed, the broker generates an ECN, which is then sent to the client via email or text message. The client can then use this document to reconcile their account or provide it to their accountant/tax consultant.

In addition to providing proof of a trade, an ECN also contains other important details such as the brokerage fees, service tax, stamp duty, and other charges. This ensures that the client is aware of all the costs involved in the transaction.


In today`s digital age, electronic documents such as ECNs have become an essential part of the stock market. They provide legal validity, serve as official records, and make the process of maintaining transaction records much simpler and more accurate. As a trader, it is important to understand the significance of ECNs and ensure that you receive them for every transaction.