Sebi's Common Contract Note reform poised to boost BSE's cash market share
Sebi
) mandate requiring exchanges to adopt a
Common Contract Note
(CCN) is likely to benefit
BSE
by enabling institutional investors to route orders more efficiently through the exchange. The reform is expected to enhance liquidity and potentially revive trading interest in BSE's cash market segment. Moreover, it could help offset the negative impact of shifting derivatives expiry to Thursday, which had previously weighed on BSE's trading volumes.
According to a Bloomberg report,
Jefferies
had last month noted in a report that implementing a common contract note could boost BSE's market share in the cash segment, as it will likely remove a key friction point for institutional investors who previously preferred other exchanges due to simpler post-trade processes.
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The market regulator on Wednesday mandated the use of a Common Contract Note (CCN) with a Single Volume Weighted Average Price (VWAP) effective June 27, 2025. This move comes with a view to simplify post-trade processes and boost ease of doing business for institutional investors.
Until now, institutional investors and market participants were burdened with separate trade confirmations from each exchange, leading to cumbersome reconciliation, settlement complexities, and increased compliance headaches. Responding to long-standing demands from industry stakeholders, regulators, in collaboration with exchanges and clearing corporations, developed a single consolidated contract note mechanism with a uniform VWAP.
Under the new system, all trades executed across multiple exchanges will be consolidated into a single, harmonised contract note, drastically simplifying post-trade reporting. This eliminates the need for investors to process and reconcile multiple contract notes, streamlining the settlement workflow.
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The reform is expected to increase cost efficiency, reduce manual errors, and ease the compliance burden on brokers, institutional investors, and custodians. Additionally, it aligns with the Common Clearing interoperability framework, ensuring consistent and standardised trade reporting across the capital markets ecosystem.
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