Sebi declines Karvy's plea to use PoA for settling clients' pay-in obligations to exchanges

Capitalstars Investment Advisor

Markets regulator Sebi has dismissed Karvy Stock Broking's plea to use the power of attorney for the limited purpose of transfer of securities to the pool account for settling the clients' pay-in obligations to stock exchanges.

Sebi in its order dated November 29 noted that clients of stockbrokers are free to avail various modes for giving instructions to the brokers including through power of attorney (PoA) and giving instructions through PoA is not mandatory.

Sebi noted that its circular on Delivery Instruction Slip (DIS) provides a detailed framework for instructions for delivery of securities such as instruction received from illiterate persons/from blind persons/though fax, SPEED-e facility, etc.

A DIS is used by sellers of securities to instruct their depository participant to debit their demat account.

"If any client seeks to give instruction in physical form, he may also do so by sending the DIS through fax to depository participant and original DIS may be sent within three days of the fax. The client who seeks to send physical DIS, in addition to sending it by fax has the option to deliver the same at the offices of the broker or the depository participant," Sebi said.

Sebi's directive on Friday came after the Securities Appellate Tribunal asked the regulator to look into the issue clarification sought by Karvy Stock Broking with regard to usage of PoA given by clients.