SEBI vide its circular dated 18th August, 2022 decided to amend clause 5 of SEBI circular dated 16th July, 2021 where SEBI introduced block mechanism in the demat account of clients undertaking sale transactions, for ease of operations in Early Pay-in mechanism.
| Clause 5 of the circular dated 16th July, 2021 stated following : | “5. The proposed facility of block mechanism is on optional basis and Early Pay-in mechanism shall also continue.” |
| Clause 5 of the circular dated 18th August, 2022 pursuant to amendment : | “5. The facility of block mechanism shall be mandatory for all Early Pay-In transactions.” |
SEBI, further added that amendment was made after extensive consultation with Depositories, Clearing Corporations and Stock Exchanges, and considering the benefits of block mechanism.
SEBI advised Depositories and Clearing Corporations shall put in place appropriate systems to ensure compliance of the provisions of this circular.
This circular shall be applicable with effect from 14th November, 2022 and all other provisions of the circular dated 16th July, 2021 shall continue to remain applicable.
It is to be noted that this circular is applicable to all Depositories and recognized Stock Exchanges and Clearing corporations.
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