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No Restriction Put On Use Of PoA By Brokers: SEBI

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On Tuesday, the market watchdog SEBI cleared that it has not placed any restriction in the use of Power of Attorney (PoA) between a client and a broker in the equity markets.

No Restriction Put On Use Of PoA By Brokers: SEBI
 

Further it said that the system is currently in place where brokerages using power of attorney transfer clients' shares as margin into its client's collateral account. Thereafter places these shares or securities with clearing corporation by transferring or creating pledge towards margin.

"There is no change caused in conditions of POA," the Securities and Exchange Board of India (SEBI) said in a statement.

Also, it added that even beyond June 1, brokerages making use of POA can continue with transferring client securities to its client's collateral account for margin.

The difference though now would be that the brokerage firm will not be able to show all securities in the client's demat account as margin collected.

And for these securities to be posted as margin, even today these are required to be transferred from client's demat account to clearing member or CC's collateral account.

With PTI Inputs

Read more about: sebi power of attorney
Story first published: Wednesday, May 27, 2020, 7:59 [IST]
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