What is Block Mechanism?


What is Block Mechanism?

Block Mechanism is the process in which the shares sold by you in the market gets blocked from your Demat account preventing you from selling them again. These will be taken out from your demat account towards your sales, i.e, pay-in on the settlement date. 

Why do I get SMS and Email from NSDL on Block Mechanism?

These are intimation about the way block mechanism works. Whenever, you sell a share, the Clearing Corporation will match your sale obligation against your holdings in your demat account. For the Clearing Corporation to match this, your demat account and your UCC (Unique Client Code which is your 8 digit Trading Account number) should be mapped/linked correctly. If they are not matched the Clearing Corporation will not block the shares from your demat account when sold and it will be considered as short. 

When can I expect a SMS from NSDL about blocking of shares?

You may expect a SMS whenever you sell shares from your demat account. A sample of it is given below for your referenence.

On DD/MM/YY, (quantity) share name Blocked in your a/c xxxxxxxx for Block Early-Pay-in..NSDL.

Is there any thing that I need to do here?

Not really. We automatically map your Demat account with your UCC when you open an account with us. We also match your sale obligation based on your UCC, TM ID (Trading Member ID), CM ID (Clearing Member ID), Exchange ID, ISIN etc., to ensure successful transfer on sale. 

What is the benefit of Block Mechanism?

As the shares stay in your demat account till the payin date, unlike in earlier cases, where they will be moved from demat to pool account well before payin date, all corporate action benefits, if any, will be directly credited to your bank / demat account.

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