Shares get block in the demat account of the client in favour of Clearing Corporation. If sale transaction doesn’t get executed, shares shall continue to remain in the client’s demat account and will be unblocked at the end of the T day.
NSDL provides the unique UCC details of transfer instructions viz., UCC, TM ID, Exchange ID to CCs to get EPI benefits.
Clearing Corporation CC matches the client level net obligations with the EPI details provided by NSDL and CC releases the EPI benefit to client.
If the unique UCC details are not identified in UCC master based on instruction details Instructions will not be considered for Block Mechanism and such securities are transferred and credited to CM Pool account through existing process i.e. by executing IDT/DO instruction to get EPI benefits from CCs. CCs will upload EPI reversal file in NSDL system for cancellation of EPI instruction which do not matches with client level net sale obligation, available with CCs.
NSDL will receive client wise net sale obligation details On daily basis in respect of agreed segments and market types. If EPI instruction details provided by NSDL do gets match with client level net sale obligation the shares gets debited from client’s blocked account to CM Pool account and further to CCs for settlement on BOD of pay-in.
Process of Block Mechanism do away with the movement of shares from clients demat account for early pay-in and back to clients demat account if trade is not executed. In Block Mechanism securities remain blocked in clients demat account till BOD of pay-in, Corporate Action, if any, during this period, client remains registered holders in books of Company’s records.
Below are the sources through which Client can submit instruction for Block Mechanism.
Physical DIS with specific Annexure
Electronic Mode at e-service portal
Broker can initiate (POA holder)
NSDL Demat Gateway e-DIS.
Pay-in instructions (both EPI and Non-EPI) must be submitted to the Depository system with the 'execution date' between the trade date and pay-in date (within stipulated time before pay-in deadline). In case the client submits a pay-in instruction before that, say before the trade date, the 'execution date' should be on or after the trade date. If the client submits an instruction with an 'execution date' before the trade date, such instructions may be rejected. Participants are requested to take note of the same and inform their TMs/CMs/Clients suitably.
EPI instruction through Block Mechanism is not mandatory but it’s optional. Normal existing Early Pay-in process through CM pool account shall also continue and remain unchanged. The Account Transfer or Inter Depository Transfer (IDT) with block facility for transferring the securities from client’s demat account to the CM’s account will be always initiated with Early Pay-in facility in NSDL system. Upon execution of instruction with block with EPI facility, the securities immediately gets blocked and details are shared with respective Clearing Corporation (CCs) so that client gets EPI benefits.
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