SEBI issues Circular on Block Mechanism in demat account of clients undertaking sale transactions.


The Securities and Exchange Board of India on 16th July 2021 has notified that the block mechanism in the Demat account of client undertaking sale transaction would be available from 1st August 2021.

A facility of block mechanism in the Demat account of clients has been made available by the depositories. The securities lying in the client’s Demat account may be blocked in favour of Clearing Corporation either by the client himself using depository’s online system or eDIS mandate or through depository participant based on physical DIS given by client or Power of Attorney (POA) holder.

If the sale transaction is not executed, shares will continue to remain in the client’s demat account and will be unblocked at the end of the T (Trade) day. Blocking of shares will be on ‘time basis’.

If securities for sale are blocked in the depository system in favour of clearing corporation, all margins would be deemed to have been collected and penalty for short/non-collection of margin including other margins shall not arise.

Further, the proposed facility of block mechanism is on an optional basis and the EPI mechanism will also continue.

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