Fun Time, Gala Time

Today, at least, the NSEs trading system allows the brokers to instantaneously print or download the trade confirmation slip. This, besides the usual buy/sell, security name, price and quantity information, contains the client account number, order number, order time, trade number and trade time. A basic software, at the brokers end, then transfers these

details to the contract note that is issued to the client.

In the floor-based trading era, when it was not possible for brokers to provide such information, a practise called gala prevailed. Gala was the unethical and illegal practise of telling the investor that his trade took place at a price which was different from that

 

which actually took place. There was no way the investor could be confident that his broker was not cheating him in the contract note.

One would expect the fully automated SEs to make it mandatory for their members to incorporate trade time and number information in their contract notes to clients. Unfortunately, some SEs still havent. As a result, quite a few of their brokers continue to indulge in gala.

Specifically, while, at least, NSEs regulations made it mandatory, from day one, for members to provide all trade details in the contract note, the BSE did not, although it has now decided to do so (which however will take a few more months to be effected). Even on the NSE some members do not comply with this requirement. The trade time column in the contract note is left blank by some NSE brokers. The list of non-complying brokers includes well-known names as well.