To protect investors’ money from being lost to default by trading members or clearing members, the market regulator has introduced a UPI block facility.With this, the funds will be blocked in the investor’s bank account, instead of them being transferred to the trading member (stock brokers). “The facility will be provided by integrating Reserve Bank of India (RBI) approved Unified Payments Interface (UPI) mandate service of single-block-and-multiple-debits with the secondary market trading and settlement process,” the circular from the Securities and Exchange Board of India (Sebi) stated.The funds for the transactions will be blocked in favour of the clearing corporation (CC) till the expiry date of the block mandate or till block is released by the CC, or debit of the block towards obligations arising out of the trading activity of the client, whichever is earlier.Also, settlement for funds and securities will be done by the CC without intervention by the stock broker.While the UPI block will be considered for collateral investors provide for training, the block will also be made available for settling trades. If the client has kept a lumpsum amount, then this amount can be debited multiple times across various days.Since an investor can have multiple trading accounts across brokers, he/she can choose to have the UPI block facility in one or more brokers, and have non-UPI facility in others.If the investor chooses the UPI-block facility, then he/she and the broker has to adhere to a few conditions.One, all cash collaterals have to be placed through the UPI block facility only. Two, cash equivalent collateral such as bank guarantees and fixed deposits will not be permitted. Three, securities collateral will have to be provided through pledge/re-pledge system and only with those securities that are on the approved list of CC. Four, funds pay-in settlement has to be done through the UPI- block facility only.