SEBI has introduced the mechanism of “Demat Debit and Pledge Instruction (DDPI)” vide circular dated April 04, 2022. DDPI shall serve the same purpose of POA by significantly mitigating the misuse of POA.
We all know, when you buy securities via your trading account, they are kept within the Demat Account maintained with CDSL/NSDL. When you decide to sell them, it’s withdrawn from your Demat Account. Your broker can withdraw to deliver them to the exchange either by using the POA or E-DIS or Demat Debit and Pledge Instruction (DDPI).
By submitting Demat Debit and Pledge Instruction (DDPI) to your broker, you basically allow them to debit securities from your demat account to deliver them to the exchange. By submitting, you are no longer required to enter the CDSL T-PIN and OTP to sell shares. You are not even required to submit a POA.
With Demat Debit and Pledge Instruction (DDPI), stock brokers can debit shares from the client’s account only if the client has placed a sell trade.
Some brokers are providing an online e-sign facility to submit DDPI. Or else, you can download and sign the Demat Debit and Pledge Instruction (DDPI) to send the signed filled copy to the registered address of the broker.
Please note, submitting DDPI is optional. You can continue using CDSL TPIN to authorise the debit of securities.
Demat Debit and Pledge Instruction (DDPI) shall be used for following purposes;
- Transferof securities held in the beneficial owner accounts of the client towards Stock Exchange related deliveries/settlement obligations arising out of trades executed by clients on the Stock Exchange through the same stock broker.
- Pledging/ re-pledging of securities in favour of trading member (TM)/ clearing member (CM) for the purpose of meeting margin requirements of the clients in connection with the trades executed by the clients on the Stock Exchange.
- Mutual Fund transactions being executed on Stock Exchange order entry platforms; and
- Tendering shares in open offer through Stock Exchange platforms
Securities transferred on the basis of the DDPI provided by the client shall be credited to client’s TM pool account / CM pool account / demat account of clearing corporation, as the case may be.
The Demat Debit and Pledge Instruction (DDPI) provided by the client shall be registered in the demat account of the client by TM /CM.
Stock Exchanges and Depositories shall ensure that stock broker and depository participant providing DDPI facility, has enabled its clients to revoke / cancel the DDPI provided by them.
If you have already submitted Power of Attorney to your broker, then it will continue to work unless you revoke the same. You can revoke the POA by submitting an account modification form to their office.
In case POA or Demat Debit and Pledge Instruction (DDPI) is not submitted to the broker, then for each stock sale transaction, the electronic delivery instruction slip (E-DIS) must be mandatorily submitted.
