MANU/SSMD/0043/2022
Ministry : Securities and Exchange Board of India
Department/Board : Market Intermediaries Regulation and Supervision Department
Circular No. : SEBI/HO/MIRSD/DoP/P/CIR/2022/143
Date : 27.10.2022
Notification/ Circulars Referred : Circular no. CIR/HO/MIRSD/DOP/P/CIR/2022/595 dated July 16, 2021 MANU/SSMD/0028/2021;Circular no. SEBI/HO/MIRSD/DoP/P/CIR/2022/109 dated August 18, 2022 MANU/SSMD/0036/2022
Citing Reference:
Circular no. CIR/HO/MIRSD/DOP/P/CIR/2022/595 dated July 16, 2021 MANU/SSMD/0028/2021 Referred
Circular no. SEBI/HO/MIRSD/DoP/P/CIR/2022/109 dated August 18, 2022 MANU/SSMD/0036/2022 Referred
To,
All Depositories
All recognized Stock Exchanges and Clearing Corporations
Madam / Sir,
Block Mechanism in demat account of clients undertaking sale transactions - Clarification
1. SEBI, vide circular no. CIR/HO/MIRSD/DOP/P/CIR/2022/595 dated July 16, 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.
2. Subsequently, vide circular no. SEBI/HO/MIRSD/DoP/P/CIR/2022/109 dated August 18, 2022, SEBI made the facility of block mechanism mandatory for all Early Pay-In transactions by amending clause 5 of circular dated July 16, 2021 as under:
"5. The facility of block mechanism shall be mandatory for all Early Pay-In transactions."
3. In view of the representations received from Depositories and Custodians, it is clarified that the block mechanism shall not be applicable to clients having arrangements with custodians registered with SEBI for clearing and settlement of trades.