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Sebi issues fresh guidelines to curb misuse of clients' power of attorney

Sebi issues fresh guidelines to curb misuse of clients' power of attorney

To curb possible misuse of Power of Attorney (PoA) given by clients to stock brokers, Sebi on Monday came out with fresh guidelines wherein execution of a new document will be made compulsory for transfer of securities towards deliveries and settlements.

The execution of the document -- Demat Debit and Pledge Instruction (DDPI) -- will also be applicable for pledging or repledging of securities.


The fresh guidelines, which will be effective from July 1, also comes against the backdrop of instances of misuse of PoAs.

Under DDPI, clients can explicitly agree to authorise the stock broker and depository participant to access their beneficiary ownership account for the limited purpose of meeting pay-in obligations for settlement of trades executed by them, according to a circular.

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