Block Mechanism in demat account of clients undertaking sale transactions

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..... cular no. SEBI/HO/MIRSD/DOP/CIR/P/2020/73 dated September 15, 2020, issued clarification w.r.t. collection and reporting of margins by Trading Member (TM) / Clearing Member (CM) in Cash Segment. It was inter alia clarified that if Early Pay-In (EPI) of securities has been made to the Clearing Corporation (CC), then all margins would deemed to have been collected and penalty for short /non-collecti .....

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..... sale transaction is not executed, shares shall continue to remain in the client's demat account and will be unblocked at the end of the T day. Thus, this mechanism will do away with the movement of shares from client's demat account for early pay-in and back to client's demat account if trade is not executed. 4. Process flow for Block Mechanism: 4.1. The securities lying in client's demat accou .....

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..... t obligation exists for that client. Matched orders: 4.5. In case of matched orders, block securities will be debited from Client's demat account and will be credited to linked TM Pool account upto pay-in day. TM shall further transfer such securities to CM Pool account. 4.6. TM shall not transfer the securities to any other pool account other than CM pool account mapped to the TM account. P .....

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..... d and become free in client's demat account on T day itself. 4.11. Broker or client shall not be allowed to unblock securities if EPI benefit is provided by CC to client for the same. Margining of Trades: 4.12. When the client intends to block securities for a sale transaction, shares will remain blocked in favour of CC. If securities are blocked in favour of CC, then all Margin would deemed .....

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..... of the Securities and Exchange Board of India Act, 1992, and Section 19 of the Depositories Act, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets. Yours faithfully Narendra Rawat General Manager Market Intermediaries Regulation and Supervision Department
Circular, Trade Notice, Public Notice, Instructionsor O .....

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