Markets regulator Securities and Exchange Board of India (SEBI) has extended the date for implementing norms pertaining to power of attorney (POA) given by clients to trading members or clearing members till August 1, 2020 from June 1, 2020. The decision regarding extension has been taken due to the difficulty faced by the stock brokers and broker associations in implementing the provisions amid the situation arising due to COVID-19.
What is POA?
It is a document allowing an individual or entity to appoint a person or organization for managing the former’s property, financial, or medical affairs if he/she/it becomes unable to do so.
What are POA norms?
In a bid to curb the misuse of POA given by the clients to the trading member (TM) or clearing member (CM), SEBI had prescribed that margin obligations to be given in the form of securities by client will be by the way of pledge or re-pledge in the depository system.
- Also the title transfers of securities to the client collateral demat account of the TM/ CM for margin purposes will not be permitted.
- 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, 2020.
Establishment- April 12, 1992, in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
Headquarters– Mumbai, Maharashtra
Chairman– Ajay Tyagi