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<h1>SEBI Mandates Block Mechanism in Demat Accounts for Early Pay-In Transactions; Custodian-Handled Trades Exempt.</h1> The Securities and Exchange Board of India (SEBI) has clarified the implementation of a block mechanism in demat accounts for clients undertaking sale transactions. Initially introduced as optional, this mechanism became mandatory for all Early Pay-In transactions as of August 18, 2022. However, clients with arrangements with SEBI-registered custodians for trade clearing and settlement are exempt. Depositories and Clearing Corporations must ensure compliance, while Stock Exchanges and Depositories are required to update their rules and report implementation status to SEBI. This directive is issued under the authority of SEBI to safeguard investor interests and regulate securities markets.