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What is Power of Attorney (POA) and Demat Debit and Pledge Instruction (DDPI)?

A POA is a document that allows a broker to debit shares from the demat account and deliver them to the exchange. Even though a limited POA is used for trading, there have been instances of misuse by debiting shares without a sell trade, breaking POA clauses, trading on a client's account based on a POA, etc.

To prevent misuse of POA, SEBI, through this circular (WEB), has introduced DDPI, which limits debiting shares from a client’s account only for secondary market transactions, i.e, debiting shares from the client’s account in case there’s a sell trade on Kite. DDPI is effective from September 1, 2022.

Activation of POA can be done only offline. Both the POA and DDPI (PDF) must be submitted together to the following address:

153/154, 4th Cross, J.P Nagar 4th Phase,
Opp. Clarence Public School,
Bengaluru - 560078

Why is POA needed along with DDPI?

DDPI can be used to debit shares from an investor's account only for secondary market transactions. POA is still required to debit mutual fund units or shares when a client places a mutual fund redemption order, buy-back order, etc., as the DDPI won't work in this case.

Did you know? Client's who have opened accounts online can use the CDSL TPIN to authorise debit of shares. To know more, see How do I generate the CDSL TPIN required to authorise my CNC sell transactions?