Unified Payment Interface (UPI) Block Mechanism
- Recently, Securities and Exchange Board of India (SEBI) has proposed mandatory Unified Payments Interface (UPI) block mechanism facility for secondary market trading using UPI-based block mechanism for its clients.
About Unified Payments Interface (UPI) Block Mechanism
- This is similar to the Application Supported by Blocked Amount (ASBA) feature which allows trading with a blocked amount.
- In the primary market, this feature ensures that the investor’s money is transferred only when the allotment is completed.
- In the UPI block mechanism, customers can trade in the secondary market based on funds blocked in their bank accounts, instead of transferring funds to the trading member in advance.
- This feature is currently optional for investors, and is not mandatory for Trading Members (TM) to offer as a service to clients.
- Importance: It provides better security to customer’s funds and securities.
