According to estimates, every year around 15,000 tonnes of paper is used in issuing these duplicate contract notes. "The regulations need to be amended in order to reduce the paper work and reduce cost for brokers," said Jain. Sebi's senior executive director, D N Rawal, says physical documentation is necessary as a large number of market intermediaries have complained of "system failure" at the time of inspection of stock brokers.

As per the Sebi (stock brokers and sub-brokers) Regulation 1992, every stock broker has to keep the counterfoil or duplicate of contract notes issued to clients and these records have to be maintained for a minimum of five years. "With the trading in electronic form, all the records by brokers is kept on floppies and there is no need for keeping the records in paper form," Jain says.

"These regulations were introduced before 1994, when there was hardly any screen-based trading. But over the years, markets have changed and, hence, the need for a change in the regulations is necessary," says a NSE and DSE member. Since 1994, stock markets have seen a sea change, including on-line trading, corporatisation of stock brokers, automation of back office of brokers and introduction of the depository system.

"Globally, the brokerage industry is fast moving towards an Internet-based trading system and the trend is also conspicuous in India," the broker said. The provision relating to issue and maintainance of contract notes has become antiquated and redudant, he said.