The Securities and Exchange Board of India on 27th October 2022, based on the representations received from Depositories and Custodians, it has that the block mechanism shall not be applicable to clients having arrangements with custodians registered with SEBI for clearing and settlement of trades.
SEBI vide circular date 16th July 2021, introduced block mechanism in the demat account of clients undertaking sale transactions, for ease of operations in Early Pay-in mechanism. The mechanism was introduced on optional basis.
Further SEBI made the facility of block mechanism mandatory for all Early Pay-In transactions, however, it has now clarified that the block mechanism shall not be applicable to clients having arrangements with custodians registered with SEBI for clearing and settlement of trades.
