In a landmark move to streamline post-trade processes and promote ease of doing business for institutional investors and market participants, the Securities and Exchange Board of India (SEBI) has made the Common Contract Note (CCN) with a Single Volume Weighted Average Price (VWAP) mandatory from June 27, 2025.
This regulatory change marks a major shift in how trade confirmations are issued in India’s capital markets, especially for trades executed across multiple exchanges. By consolidating trade data into a single, standardized format, SEBI aims to reduce complexity, improve operational efficiency, and enhance the overall post-trade experience for intermediaries and investors alike.
The Problem with the Old System
Until now, institutional investors and traders dealing across exchanges were required to manage separate trade confirmations for each exchange. This legacy system often led to:
- Complex reconciliation processes
- Redundant documentation
- Delays in settlement and trade matching
- Increased compliance and regulatory reporting burdens
Market participants repeatedly highlighted these inefficiencies, noting that the fragmentation of post-trade data led to inconsistencies, higher operational costs, and increased risk of errors in reporting and settlement.
The New CCN Framework
SEBI, in consultation with key stakeholders including brokers, exchanges, custodians, and institutional investors, has introduced a single, consolidated contract note mechanism that incorporates a uniform Volume Weighted Average Price (VWAP) across all trades executed on multiple exchanges.
Under this system, a Common Contract Note will:
Consolidate all trades executed on different exchanges into one document
Report a single VWAP for each security, offering a more accurate representation of the average execution price
Standardize post-trade communication, regardless of the venue where the trade occurred
This change aligns with SEBI’s broader Clearing Corporation Interoperability (CC Interoperability) framework, which seeks to harmonize clearing and settlement across exchanges to promote efficiency and reduce systemic risk.
Key Benefits of the Reform
Simplified Post-Trade Reporting
A single contract note eliminates the need to process multiple documents, reducing back-office workload and making reporting more straightforward for compliance teams.
Improved Cost Efficiency
By reducing duplication and reconciliation overheads, the CCN system cuts operational costs for brokers, custodians, and institutional clients.
Enhanced Accuracy and Transparency
The use of a single VWAP improves price transparency and gives investors a clearer understanding of the average execution price across venues.
Regulatory Compliance Made Easier
Harmonized contract notes simplify compliance with trade reporting and audit requirements, reducing the risk of discrepancies or regulatory violations.
Looking Ahead
This reform is another example of SEBI’s commitment to modernizing India’s financial infrastructure and aligning it with global best practices. For institutional investors, custodians, and brokerages, the introduction of the CCN with VWAP brings much-needed uniformity and efficiency to the trade confirmation process.
As the financial markets become more complex and interconnected, such initiatives play a crucial role in reducing friction, improving trust, and supporting India’s ambition to become a leading global investment destination.
Market participants are encouraged to update their internal systems and workflows to align with the new requirements effective June 27, 2025. For more details, the official circular and implementation guidelines are available on SEBI’s website.
