FAQs on Block Mechanism

FAQs on Block Mechanism

(1)What is processing of instructions under Block mechanism? 
Answer: 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.  
(2)What is benefits of Block Mechanism? 
Answer:  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.  
(3)What are the benefits to Client w.r.t. Corporate Action due to Block Mechanism? 
Answer: Since 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. 
(4)What are the sources through which Client can submit instruction for Block Mechanism? 
Answer: 1) Physical DIS with specific Annexure 2) Electronic Mode at eservice portal 3) Broker can initiate (POA holder) 4) NSDL Demat Gateway – e-DIS 
(5)Is Early-Pay-In (EPI) instruction through Block Mechanism is made mandatory by SEBI? 
Answer: 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. 
(6)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 (True OR False) 
Answer: True 
(7)What is the impact on execution of instruction with block with EPI facility? 
Answer: The securities will be blocked immediately in client account in NSDL system 
(8)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. (True or False) 
Answer: True 
(9)What are the details provided by NSDL to CCs to get EPI benefits? 
Answer: NSDL provides the unique UCC details of transfer instructions viz., UCC, TM ID, Exchange ID  
(10) What are the details that are matched by Clearing Corporation (CC) with the EPI details provided by NSDL and CC releases the EPI benefit to client  
Answer: CC matches the client level net obligations  
(11) What will be the impact if the unique UCC details are not identified in UCC master based on instruction details? 
Answer: 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. 
(12) The securities will be blocked in client’s account even though NSDL could not able to find unique UCC details in UCC master. (True OR False) 
Answer: False 
(13) When does CC will upload EPI reversal file in NSDL system for cancellation of EPI instruction? 
Answer: 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 
(14) What is the frequency to provide the client wise net sale obligation details to NSDL? 
Answer: On daily basis in respect of agreed segments and market types 
(15) If EPI instruction details provided by NSDL do not get match with client level net sale obligation the shares gets unblocked in BOD of pay-in date. (True OR False) 
Answer: False 
(16) 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 (True OR False) 
Answer: True
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