SEBI issues clarification on Execution of ‘Demat Debit and Pledge Instruction’ (DDPI) for transfer of securities towards deliveries / settlement obligations and pledging / re-pledging of securities.

The Securities and Exchange Board of India on 6^th October 2022, has decided to widen the widen the scope of DDPI to include Mutual Fund transactions being executed on Stock Exchange order entry platforms; and Tendering shares in open offers through Stock Exchange platforms. This circular shall be applicable from 18^th November 2022.

In order to make the process more transparent and simpler, the following conditions shall be made part of a separate document viz. ‘Demat Debit and Pledge Instruction’ (DDPI).

• Transfer of securities held in the beneficial owner accounts of the client towards Stock Exchange related deliveries / settlement obligations arising out of trades executed by clients on the Stock Exchange through the same stock broker.
• Pledging / re-pledging of securities in favour of trading member (TM) / 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.
• Mutual Fund transactions being executed on stock exchange order entry platforms and which shall be in compliance with SEBI’s earlier circular dated 4^th October 2021 and 15^th March 2022.

“Securities transferred on the basis of the DDPI provided by the client shall be credited to client’s TM pool account / CM pool account / demat account of clearing corporation, as the case may be. The DDPI provided by the client shall be registered in the demat account of the client by TM /CM. Stock Exchanges and Depositories shall ensure that stock broker/stock broker and depository participant providing DDPI facility, has enabled its clients to revoke / cancel the DDPI provided by them.”