The Hong Kong contract-note delivery deadline

A contract note records the intermediary's dealing for the client. Timing matters. Under section 5(1) of the Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules, the intermediary prepares and provides the note within two business days after entering into a relevant contract. The trigger is the contract date, not the date the client later checks the account statement.

What starts the clock

The SFC's FAQ explains that the two-business-day period starts when the relevant contract is entered into. For a fund transaction, the time will ordinarily be when the fund house accepts the dealing request and communicates that acceptance to the intermediary acting for the investor. The exact point depends on the contractual facts and the medium of acceptance; it is not automatically the date a later confirmation reaches an operations team.

The note does not have to arrive at the client's door by T+2

The SFC distinguishes issuance from physical receipt. The clock concerns issuance. The note must be prepared and issued in time, but it need not have reached the client within the two-business-day period. Where the note is sent by post, it must be created and dispatched within the period in the manner the Rules require. If the intermediary provides documents electronically, it must meet the applicable consent and access safeguards for that method.

A note must still contain required information

Meeting the timing deadline does not cure missing content. Section 5(3) sets out information required in a contract note, to the extent applicable. The SFC states that issuing an incomplete note and correcting it later is still non-compliance when required details were missing. Firms should arrange with executing or overseas brokers to receive the information needed before the deadline.

Issuing a document online

The SFC permits an online access service to provide specified trade documents when the client has given positive, revocable consent and the intermediary has adequate safeguards for notice and access. A document posted to a website without proper consent and retrieval access should not be assumed to satisfy the service requirements.

Exam traps

• Starting the period from settlement rather than contract entry.
• Saying overseas securities are outside the rule because the trade executed abroad.
• Treating client receipt and intermediary issuance as the same deadline event.
• Assuming an incomplete note is compliant if the missing details are supplied later.
• Confusing a contract note with a periodic statement of account.

Key takeaway

For a relevant contract, count two business days from contract entry. Issue a complete note in time. The client need not physically receive it by that deadline, and covered overseas trades remain within the SFC's stated rule.

The note confirms a completed transaction

A contract note is a post-trade record that confirms the essential terms of a securities or futures transaction. It helps the client check what was executed, when, at what price, in what quantity and with what charges. The applicable SFO subsidiary legislation sets the required particulars and delivery timing for the relevant transaction and intermediary. Staff should distinguish the legal delivery deadline from a broker’s faster internal service target and identify whether the transaction type falls within the rule being tested.

Content and delivery controls

The note should be generated from authoritative trade data and contain the prescribed information, including transaction details and charges. A robust process validates client account, instrument, side, quantity, price, trade date, settlement date where required, commission and levies. It should send the note through the agreed permitted channel and retain evidence of successful dispatch or handling of a delivery failure. Corrections should be traceable and clearly linked to the original note; staff should not silently overwrite the record.

Exceptions and disputes

If a client disputes a contract note, compare it with the order instruction, order-management audit trail, exchange or counterparty confirmation, allocation and settlement records. Escalate mismatches promptly and assess whether the client has suffered loss or whether reporting is required. A delivery bounce or incorrect email address should enter an exception queue; the firm should use an approved alternative channel and update client details through its controls. Sending the note late does not become compliant merely because the trade itself settled correctly.

Exam method

Look for the rule’s trigger, required contents and timeframe. Do not confuse the contract note with a periodic account statement, order confirmation before execution, trade report to the regulator or custody statement. These documents serve different functions and may have different deadlines. If a question gives an exact statutory period, apply it to the specified regulated activity and transaction; if it does not, refer to the applicable rule rather than guessing. The central lesson is that accurate, timely post-trade confirmation and retrievable delivery evidence are part of client protection.

Implementation and review

Firms should distinguish a corrected confirmation from a cancellation and rebook, because each may have different accounting and customer consequences. If an exchange busts or amends a trade, the customer record should explain what changed and preserve the original execution details and subsequent event. Automated controls can flag missing notes, but a human owner should resolve exceptions and review recurring failures. For Paper 1, remember the client-protection purpose: the note gives the customer timely, checkable evidence of the transaction and charges, while internal records support a complete audit trail.