What happens if I don’t give the Power of Attorney (POA) of my Demat account?

What happens if I don’t give the Power of Attorney (POA) of my Demat account?

Earlier, in the absence of a POA, a client would be able to sell or pledge shares which he/she owns only upon physically submitting the Delivery Instruction Slips (DIS) to the broker. This was both inconvenient and time consuming for everyone. For an active investor/trader, sending physical instruction slips each time he or she wants to do a transaction is difficult and expensive too. Please note that it is a specific POA, it restricts the nature of transactions that can be executed by the POA holder to the Specific account (Not General POA). Hence, you will only be giving authority to the POA holder for the purpose of trade settlements. In any case, the client shall receive all transaction-related information via contract notes, statement of accounts etc. on a timely basis. This helps the client to stay in touch with the activities that happen in the respective Demat account.

However, this process was further simplified with the introduction of Electronic Delivery Instruction Slip (EDIS) wherein the clients can sell their holdings with the help of TPIN without submitting the POA (refer to this blog).

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