A note issued by a stockbroker as evidence of a transaction to buy or sell shares. It is a legal document setting out details of: (1) the number of shares or amount of stock bought or sold; (2) the company involved; (3) the price; (4) the consideration; (5) the broker's commission. The note must be stamped - 1/2 per cent of the consideration. This is the transfer stamp. There is also a contract stamp at an ad valorem rate. The note must also show the amount payable to or from the broker and the date of settlement. It should be retained for capital gains tax purposes. Contract notes are often called bought notes or sold notes.
|Reference: The Penguin Business Dictionary, 3rd edt.|