However, PoA is not a mandatory document, as an investor one have the choice to decide whether to give or not to give PoA.
The PoA must be executed in the name of the broker organisation which is registered by SEBI, not in that of its employees. It must be signed by all joint holders.
There are two types of PoA
Specific PoA or Limited PoA and General PoA.
A specific PoA or a limited PoA clearly as name indicates it has limited range of powers that the person to whom PoA is given.
A general PoA authorizes the person to perform all activities on your behalf, general PoA holder enjoys wide ranging powers.
PoA should be given only for limited period, it should never be left open-ended.
- Give only specific PoA
- Specify the period for which PoA is given
- Confirm existence of revocation clause
- Retain your control by insisting that you receive contract notes, statement of account, demat transaction statement at your address.
- Do not authorize Off Market Transactions other than for margin purposes
- Do not authorize investment decisions and placing of orders using PoA
- Do not authorize transfer of securities/funds account other than that of Trading members Pool Account of Client Margin Account.
Things to remember
- Regularly monitor your transaction information like contract notes, margin information.
- Review your demat account for to and fro movement of your funds.
- Always, PoA should not include the right to open / close your account
- In case of any discrepancy immediately take up the issue with the broker( preferably in writing).
Even though you have given the PoA, you can operate your account anytime. After the submission of PoA dont forget to collect the copy of the executed PoA. In case of joint account all holders should execute PoA.
In the event of death PoA will get canceled automatically, survivor will have to execute fresh PoA.