HDFC Bank joins ‘cash segment trading via block mechanism’ in secondary market

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HDFC Bank said it acted as a sponsor and destination bank for “Trading supported by Blocked Amount in Secondary Market,” which kicked off on Monday on the Indian Stock Exchanges.

SEBI and Stock Exchanges have permitted Trading in the Cash segment through a block mechanism, on an optional basis, for the Secondary Market from January 1, 2024.

This is on the lines of ASBA (application supported by blocked amount) for primary markets where investor’s funds continue to remain in their savings account with the required funds being blocked instead of the investor having to upfront transfer the amount to the broker’s account for placing the trades.

“The bank has been able to support this new initiative of SEBI through integration of its systems with that of Exchanges & respective Clearing Corporations.

“This system integration facilitates investor validation, block creation, release, revoke, execution and end of day reconciliation & reporting. The UPI backed technology solution of block / release of funds helps investors meet margin and settlement obligations seamlessly,” the Bank said in a statement.

HDFC Bank is a clearing and settlement bank of NSE & BSE in the Cash & Equity Derivatives segments