The Securities and Exchange Board of India on 27th August 2020 has amended his earlier circular 23rd April 2020, in which it has reiterated that Power of Attorney shall be optional for opening of client account by stockbrokers or depository participants. Besides, the Power of Attorney may also be used for pledging or re-pledging of securities in favor of trading member (TM) or clearing member (CM) for the purpose of meeting margin requirements of the clients in connection with the trades executed by the clients on the stock exchange.
Further, the PoA shall not facilitate the stockbroker to transfer of securities for off-market trades, Transfer of funds from the bank account(s) of the Clients for trades executed by the clients through another stockbroker or Open a broking/trading facility with any stockbroker or for opening a Beneficial Owner account with any Depository Participant or shall Merge the balances (dues) under various accounts to nullify debit in any other account.
It has also been decided that all off-market transfer of securities shall be permitted by the Depositories only by execution of Physical Delivery Instruction Slip (DIS) Duly signed by the client himself or by way of electronic DIS.
The Depositories shall also put in place a system of obtaining the client’s consent through One Time Password (OTP) for such off-market transfer of securities from the client’s Demat account.
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