NSE launches beta version for block mechanism trading

In this pilot phase, investors will be able to block funds in their bank accounts and that will be debited by the clearing corporation during the trade settlement. The trades will be settled in a T+1 cycle

NSE on January 1 announced the successful launch of trading through a block mechanism for the secondary markets.

“The successful launch of the Beta version of Trading through Block Mechanism for Secondary Markets on Jan 1, 2024, has put the Indian securities markets in the higher orbit of the Indian capital markets tech stack by providing investors' convenience while ensuring that their funds and securities move out of their accounts only on the instructions of the clearing corporation and to the extent of their obligation”, NSE said in its press release.

The beta testing for block mechanism trading is a National Payments Corporation of India (NPCI) project to bring an Application Supported by Blocked Amount (ASBA)-like facility for UPI in the secondary market.

NPCI said the facility will block specific amounts for multiple debit transactions for trading in the stock market. In this pilot phase, investors will be able to block funds in their bank accounts and that will be debited by the clearing corporation during the trade settlement. The trades will be settled in a T+1 cycle.

The pilot facility has been approved by SEBI and RBI.

The facility will be available on UPI apps, including BHIM, Groww and YES PAY NEXT, with Groww as the brokerage app. Customers of HDFC Bank and ICICI Bank can also use the facility.