Mandatory Block Mechanism And Validation Of Instructions For Pay-In Of Securities

Validation of Instructions for Pay-In of Securities from Client Demat account to Trading Member (TM) Pool Account against obligations received from the Clearing Corporations.

Exchange	National Stock Exchange of India Limited
Notice Type:	Circular
Department:	INSPECTION
Download Ref No:	NSE/INSP/54365
Circular Ref. No:	81/2022
Date:	November 10, 2022

In this communique, SEBI has referenced circular no. SEBI/HO/MIRSD/DoP/P/CIR/2022/119 dated September 19, 2022, and CDSL communique no. CDSL/OPS/DP/SETTL/2022/660 dated November 11, 2022, containing a reference to various communique issued by CDSL from time to time, regarding

“Guidelines and Operational modalities about mandatory Block mechanism and validation of instructions for pay-in of securities from client Demat account to (TM) Trading Member Pool Account, against obligations received from the Clearing Corporations“.

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According to the Published Circular,

“Depositories, before executing an actual transfer of the securities for Pay-In from client Demat account to TM Pool account, shall validate the transfer instruction for the purpose of Pay-in. The Depositories shall validate the depository transfer instruction details with clearing corporation obligation details based on TM, UCC, CM ID, ID, Exchange ID, ISIN, quantity, settlement details etc.”

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The following is to be noted: “In case of discrepancies in details like TM, ISIN, ID, CM ID, UCC etc., between obligation and instruction, such transfer instructions will be rejected by the depositories.”

Furthermore, rejection of such instructions may result in Pay-In obligations being defaulted.

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In view of the above Circular, you are advised to ensure that the correct UCC details are mapped with your Demat account for the purpose of Pay-in Obligations. Therefore, you are requested to make a request to your depository participants to modify or add your correct UCC details, which the Depository shall process through depository Participants (DP).

Further, you should ensure that required details, e.g., UCC, TM ID, CM ID, etc., are given while submitting delivery instructions to your depository participant, as any discrepancy between instruction and obligation will result in the rejection of transfer instruction by depositories. Submitting UCC details in all early pay-in transactions (within CDSL and inter-depository) and inter-depository on-market pay-in transactions from the CDSL client account to the NSDL Pool account would be mandatory effective from November 12, 2022, and Submitting UCC details in all intra-depository non-early pay-in transactions would be mandatory effective from November 26, 2022.

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In case of any further queries/clarity on implementing the process, as mentioned earlier, investors are advised to get in touch with their respective Depository Participant (DP) / Trading Member (TM). Regards, CDSL – Operations

Direct PDF Link – INSP54365.pdf (nseindia.com)

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