Whenever you buy shares on the secondary market, the shares are credited by the Exchange to the broker’s pool account. Every broker is required to have a pool account with NSDL and CDSL which are the 2 depositories.
As a client, you’d normally have an account with either NSDL/CDSL. If you’ve opened a demat account through Zerodha, your demat account is with CDSL. Assume you buy units of SGB, these units could get credited from the Exchange either in Zerodha’s NSDL pool account/CDSL pool account. If the units get credited in the CDSL pool account, the broker can transfer these units to your CDSL account.
But, if the units get credited to the broker’s NSDL pool account, the units cannot be transferred to your CDSL demat account. This is because RBI & the depositories today, don’t allow Inter Depositary transfers (NSDL to CDSL and vice versa) in any Government security. In light of such limitation, we aren’t allowing fresh purchase from the secondary markets. If you’ve received allotment of units when the issue was open, you can redeem them by placing a sell order.
The depositaries are in touch with RBI to allow Inter DP transfers to happen after which you will be able to buy and sell these Government securities just like equity shares.