SEBI introduces Block Mechanism in demat account for sale transaction

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After extensive consultations with Depositories, Clearing Corporations and Stock Exchanges, SEBI has issued a circular to provide a mechanism of block in the demat account of clients undertaking sale transactions. When the client intends to make a sale transaction, shares will be blocked in the demat account of the client in favour of Clearing Corporation. If 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.