For the power of attorney related provision, the market regulator SEBI has extended the timeline to August 1. The provision was to otherwise to come into effect from June 1, 2020.
Earlier to prevent the misuse of power of attorney, the SEBI has suggested that margin to be provided as securities by clients shall be either by way of pledge or re-pledge in the depository system. Also securities transfer to the client collateral demat account of the trading or clearing member shall be not allowed for margin purposes.
In cases where a client has given a POA in favour of a TM / CM, such holding of POA will not be considered as equivalent to the collection of margin by the TM/ CM in respect of securities held in the demat account of the client with effect from June 1, the regulator had said.
But citing difficulties due to Covid 19, brokers and broker association made representations which said implementation of the POA ruling is difficult as owing to work in progress by market infrastructure institutions.