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Block mechanism in demat must for share sale transactions from Nov: Sebi
Markets regulator Sebi on Friday made it mandatory for investors to block securities on their respective demat accounts for sale transactions.
Currently, the facility is optional for investors.
The block mechanism in the demat accounts of clients undertaking sale transactions would become mandatory from November 14, the Securities and Exchange Board of India (Sebi) said in a circular.
Under the mechanism, shares of a client intending to make a sale transaction will be blocked in the client's demat account in favour of the clearing corporation concerned.
In July, the regulator decided to introduce the concept of a block mechanism, whereby investors have an option to block securities in their respective demat accounts for sale transactions from August 1.
The option of an early pay-in method is also available. Under this option, shares are transferred from a client's demat account to the clearing corporation concerned's account. If the sale transaction is not executed under the early