Scroll Top

search-icon
    drop-arrow

    Cancellation

    Introduction

    A broker sends a notice to his or her client informing them that an erroneous trade was made and is being rectified. This notice is called cancellation. Even if the technology has been evolving with time, there can be errors made due to human or software errors.

    However, brokers must immediately take action to correct such mistakes immediately. All the transactions taken to lay off the cancellation is recorded and is ensured that the broker hasn't mishandled the account. Also, the notice sent to the client includes details such as all transactions done and the steps taken to rectify them.

    In a trading world where technology plays a vital role and undoubtedly it has made trading a lot simpler and efficient, there are chances of an erroneous trade taking place. The broker might overbuy securities than asked to him by his client or can trade for different securities.

    These types of trade generate a need for the cancellation. Despite having modern conveniences and tools, erroneous trades occur on a fairly regular basis. This can be due to human error or technological malfunction.

    Understanding Cancellation

    Before cancelling a trade, a broker has to investigate if the exchange breaks trades when the price differs by a specified percentage from the last consolidated sale price. In such cases, the erroneous report process must start within the stipulated time, say 30 minutes, from the time of the trade. Also, the resolution of the error must be completed within the stipulated time, say 30 minutes, of the review process.

    Factors to be considered before cancellation:

    1. It might be a result of a human or an electronic error.
    2. Brokers should correct the mistake immediately, it might lead to a huge loss to his clients.
    3. Actions to rectify the mistake should be taken after sending the cancellation to the client.
    4. The brokers can be penalised if any unfair trading has been recorded.
    Index

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption