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TMI BlogExecution of Power of Attorney (PoA) by the Client in favour of the Stock Broker/ Stock Broker and Depository ParticipantX X X X Extracts X X X X X X X X Extracts X X X X ..... lly, the PoA is taken from the clients who want to avail internet based trading services. For offering internet based trading services, a Stock Broker requires necessary authorizations for seamless trading, collection of margins as well as settlement of funds and securities. Further, some of the Stock Brokers also obtain authorizations from their clients to offer non-internet based services. 3. It has come to SEBI s notice that the clients are compelled to give irrevocable power of attorney to manage client s demat account and bank account so that the client is able to pay funds or deliver shares to its broker on time. In some cases, the PoA even allows a broker to open and close accounts on behalf of the client and to trade on client s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are directed to: a) bring the provisions of this circular to the notice of the Stock Brokers/Depository Participants and also disseminate the same on their websites; b) make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision; c) communicate to SEBI, the status of the implementation of the provisions of this circular in their Monthly Development Reports. 8. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets. Yours faithfully, MANOJ KUMAR Gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clients for the following: a. For meeting the settlement obligations of the client(s)/ margin requirements of the client(s) in connection with the trades executed by the clients on the stock exchange through the same Stock Broker. b. For recovering any outstanding amount due from the client(s) arising out of clients trading activities on the stock exchanges through the same Stock Broker. c. For meeting obligations arising out of the client subscribing to such other products/facilities/services through the Stock Broker like Mutual Funds, Public Issues (shares as well as debentures), rights, offer of shares in etc. d. Towards monies/fees/charges, etc. due to the Stock Broker/Depository Participant/ Principal payable by virtue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a demat account held jointly). If the constitution of the account is changed for whatever reason, a new PoA should be executed. 11. authorize the Stock Broker/Depository Participant to send consolidated summary of Client's scrip-wise buy and sell positions taken with average rates to the client by way of SMS / email on a daily basis, notwithstanding any other document to be disseminated as specified by SEBI from time to time. General Guidelines The POA shall not facilitate the stock broker to do the following: 12. Transfer of securities for off market trades. 13. Transfer of funds from the bank account(s) of the Clients for trades executed by the clients through another stock broker. 14. Open a broking / trading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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