Depositories need to validate the transfer instruction for pay-in of securities from client demat accounts to trading member pool accounts against obligations received from the clearing corporations, SEBI said in a circular on Monday.
According to the market regulator's circular, the validation should be done prior to executing actual transfer of the securities for pay-in from client demat account to trading member (TM) pool account.
The new framework, applicable from November 25, is aimed at further mitigating the risk for clients' securities, especially those given towards delivery/settlement obligations, SEBI said.
Order matching
Clearing Corporations (CCs) will have to provide client-wise net delivery obligations on T-day to the depositories.
Based on the obligation data provided by CCs, depositories will have to validate the depository transfer instruction details with CC obligation details based on trading member ID, quantity, settlement details etc.
In case of discrepancies in details such as unique client code, trading member ID, clearing member ID, ISIN etc., between instruction and obligation, such transfer instructions will be rejected by the depositories, SEBI said.
If the quantity in instruction is less than the obligation provided by CC, then the instruction will be carried out by the depositories. However, if the quantity is more than the obligation provided by CC, then the instruction will be partially processed by the depositories (up to the matching obligation quantity), SEBI circular said.
For early pay-in transactions, the existing facility of block mechanism will continue, it further said.
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