50 thoughts on “Power Of Attorney (POA) for Demat and Trading Account-Is it mandatory?”

  1. Hello Sir,
    I have my account with Zerodha, what if i dont fill the POA form and continue trading with my TPIN, is this valid or will my account or trading be blocked after some time.?

  2. Dear Sir,
    After 1 year I have closed my demat and trading account from sbicap securities. How would I know that PoA that I have signed is revoked or not?
    Is there any other way to cancelled it ? Or sbicap securities send me any document informing that PoA is revoked?

  3. Hello Sir, I just wanted to ask that i am planning to become AP of trading member and want to trade on behalf of friends and relatives shall i do same, also can i charge for rendering the service
    if not suggest me the best way( weather i can act as a investment adviser as well as AP)

  4. Hello Sir, I am having my demat account with zerodha. So to do online transactions they r asking for POA so can I send POA through email scanned copy. Also can I send delivery instructions slips through email if I don’t give POA. Also one more thing in order to add extra security while giving POA can I mention that zerodha have to take my consent through email or call before executing any order. This way they have to take written confirmation before executing any trade from my account. Please advice for all my questions. Thanks Sir.

    1. Hello Sir,
      MSOL Agents Alluring poor Investors of Very High Return by giving false commitment and promises, and foxing them into their trap, wherein generating revenues through duping investors by greedy and false hopes.

      Stuck with MSOL sub-broker (Agent), he had assured for return of 1.8 lakh on investment of 2.5 lakh for lock in period of in year, and now refusing to honor his commitment, Sir please guide the way to recover the amount and is there any legal options available.

      As the case mentioned down below:
      1) Signed documents not handed over till date- As per SEBI guidelines all signed documents must be shared with Account holder. Asking for multiple times No documents had been shared till date.
      2) Trading Account- Broking done by Agent in Trading Account and no statements, no transaction reports shared by Agent till date.
      3) CHIT FUND Scheme- No proper information in provided on where the money is going to be invested and in what form.
      4) Opened trading account (60K) and Chit Fund account(2.5L) with a MSOL agent, wherein written promises to pay 1.8L (80:20 profit sharing ratio), but closing the trading account he had changed in profit sharing ratio to 60:40 without pre-notification to us, which we feel cheated and unethical pratice by Agent.

      regards
      sumit
      9643105025

  5. sir today i have signed form for demat and trading with NJ INDIA INVEST PVT LTD without reading and given it to agent. I have also signed POA FORM and their is nothing written specific or general. But my form is not submitted yet. Now what to do.

  6. Thanks for your information. Could you please let me know what are the remedies provided to a client if the broker carried out trades without informing beforehand? And kept the client in the dark about the performance of the account? Thanks in advance.

      1. I understood he was trading in F and O on seeing the statements but I am not aware of how it works and whenever I asked him to let me know whether I am making any profit, he kept saying yes. And when I got hold of the P and L statement, only then I realised he had made a big mess. Isn’t there any support for small investors like me who are fooled by unscrupulous brokers?

      2. Hi, despite all the discouraging response from the legal people, I went ahead and filed a complaint. I won the case and got my money back too. Advise to all investors – if you are on the right side go ahead and complain. Don’t listen to others.

  7. IS it safe to open a Demat and trading account with the same broker. Because zerodha is saying it is more covinent to open new Demat and trading account with them, but i already had Demat account with another broker.

  8. I have opened an account with Shrekhan. I have given POA to to them as its mandatory to sign the POA document for online trading. Please clarify what are the risks associated with this POA.

    Thanks,

    Ram.

  9. I have opened De-amt account with JM finance now not trading any more so I requested to close down my De-mat account but the did not done that now till I am receiving the statements that every year the AMC charges are mounting on me. IF it continue for more period what will happen whether they will recover it from my saving bank account ? what will happen to my investment in De-mat account with other brooking firm will they recover it from other de-mat account? kindly guide me on this isssue

    1. Mansing-It is better to close the unused Demat account by paying the dues. But they can’t take away cash from your savings account. Such dues not affect to your holdings in other Demat account.

  10. Hi Basavaraj

    Thankyou for elaborating on POA with Demat & Trading account, as a stock trader I receive margin statement at the end of the day and I see certain percentage of my holdings are under POA, well of-course now it make sense.

    I am very pleased with SEBI proactive steps on regulating securities market. In year 2003, when I opened a Demat-cum-Trading account with a broker, It only took me couple of signatures to get started with trading. PAN was not mandatory too. The following only attracted people to do Intra-day trades, which is not the right method of taking part in stock market. The true way is by holding for long term. For example holding a Sunpharma security worth Rs 3000 in 1994 could give 700 times return in 20 years time (Total return in 20 years = Rs 21,00,000). Information provided in Sunpharma annual report.

    Today when people open a new account they have to undergo atleast 40-50 signatures which indirectly tells the person that stock market is a serious business and it requires proper financial advisors and brokers.

    Regards
    harshil girnari

  11. hi basavraj ,

    i am in a big dilemna …
    Can you please help me ?

    My grandfather has shares in reputed company .

    the shares are in 3 people name …. my grandma and uncle …unfortunately they expired(grandma and uncle)

    there are total 150 shares ..

    We have one certificate -50 shares

    other 100 we have lost it ……

    All are in physical form

    My grandpa is bed ridden….

    What we need to do now ?

    Please advise ……

      1. Actually we need to sell existing shares and apply for the duplicate ones which is a long process….
        so can we get transferred it to our name ? or do a power of attorney

  12. Hi Basu, In one of your replies dated August 7, 2013 at 9:38 A.M.; you have mentioned “For your information, even if client does not share the login and password, they can trade on behalf of clients” (here “they” is read as Sharekhan).
    (1)Please tell the exact nature of the trade the broker can make.
    (2)Does the trade involve debit/credit from my “savings account”?
    (3)Under which type of Power of Attorney does the grant to trade on my behalf to the broker, come (General or Specific)?
    (4)Is it possible for me to not give Power of Attorney to the broker (Sharekhan) and trade online. As I read and understand that Power Of Attorney to the broker is a voluntary document?

    1. Tarun-Trading in the sense buying or selling on behalf of client, but not involve debit/credit from his savings account. Yes it is voluntary, but risk involved is very much less. Like he can only trade and at the end of trade you receive statement to your mail id, also I think NSE started sending messages whenever orders get executed. So it is more safe. Brokers can’t do such hue and cry and run away easily as in olden days. Power of attorney required and beneficial when in case you are not able to execute the orders due to net problem or some other reasons.

      1. So now all brokers have the ” specific POA’ form as designed by SEBI. Right? Not the general POA form? Or we should check it before signing?

          1. Following lines have been written in my broker’s form. I hav 2 yet open Ac with this “trade smart online” broker. Plz guide if its safe?
            AUTHORIZATION FOR ACCOUNT MODIFICATION
            If I/we were to add/modify/remove any of my detail including brokerage plans with VNS Finance & Capital
            Services ltd., I/we authorize you to carry it out based on my request sent through an email to
            [email protected] or [email protected] from my registered email address or intimation through an
            interface provided by you, whereto I have been allowed secured access.
            Mandatory Signature No. 11______________________
            POWER OF ATTORNEY
            To all to whom these presents shall come I/we ______________________________________________________________________________
            individual/partnership firm/corporate, being Indian inhabitant send greetings.
            Whereas I/we have a beneficiary account bearing no 1 2 0 3 0 4 0 0 __________________ (hereinafter referred to as the said ‘BO account’) with VNS
            Finance & Capital Services Ltd. (Hereinafter called as “VNS” & also as “DP”) DP ID 12030400 with CDSL & registered as trading member with SEBI as
            INE230964330/ INF230964330/ INB010964337/ INE260964330, We also have the trading/ investment account with VNS and I/we am/are desirous of appointing an agent
            / attorney to operate said account on my behalf in the manner hereinafter appearing.
            Now know we all and these presents witness that I/we, the above named do hereby nominate, constitute and appoint VNS Finance & Capital Services Ltd. an
            Indian company registered under The Companies Act, 1956 acting through its Directors and/or Officers authorised for the purpose, as our true and lawful attorney(s)
            (herein after referred to as “the attorney(s)”) for me/us and on my/our behalf and in my/our name, to do the following acts, deeds and things and exercise the
            following powers and authorities;
            1. To do all such thing and give all such instructions as mentioned below concerning the said account as I/we myself/ourselves could give if I/we was/were personally
            present.
            2. To treat the balance in my BO account as margin against my transactions in capital and derivative segment and to pledge/ unpledge the same with the VNS or
            NSE or BSE or clearing member as margin deposit.
            3. To instruct DP to transfer the shares to VNS margin account number 1203040000007539 &/or 1203040000000172 &/or 1203040000062527 & pledge/ unpledge
            the same with the NSE/BSE or clearing member as margin deposit.
            4. To instruct the DP to debit securities including Mutual Fund Units to the said BO account and/ or transfer securities from the said account to VNS NSE pool account
            nos. 1203040000000339/ IN555300, and/or to NSE early pay-in account no. 1100001100015386 and/ or VNS BSE pool account nos. 1203040000055906/
            1203040000055910/ IN632792 to the extent of shares sold by me/us for pay-in obligations towards any stock exchange.
            5. To instruct the DP to debit /credit securities including units of Mutual funds, to the said account, which have been wrongly credited or debited in my BO account.
            6. To transfer charges levied in my BO account to my trading ledger account of NSE & BSE.
            7. To apply for other capital market products like Mutual Funds, IPO, rights, offer for sale in Buyback etc, pursuant to oral/written/electronic instructions given by me.
            8. And for all or any of the purpose aforesaid, to appoint from time to time a substitute or substitutes and revoke such substitution. The appointment of any such
            substitute shall not affect or prejudice the rights or powers of the Attorney to act hereunder and the Attorney may continue to do so notwithstanding such
            appointments.
            And I hereby agree and confirm that the powers and authorities conferred by this power of attorney shall continue until I/we inform to the contrary, in writing & duly
            acknowledged by DP at A-401, Mangalaya Marol Maroshi Road, Marol Mumbai. The said revocation will take effect after the completion of outstanding obligations.
            SIGNED AND DELIVERED )
            BY THE WITHIN NAMED )
            IN THE PRESENCE OF (Witness) )
            Accpted
            For VNS Finance & Capital Services Ltd.
            (initial)
            Signature No. 27
            (IF Partner, Corporate or Other Signatory,
            then sign with Company Seal

            1. Sachin-It seems to be only few points when I compared with Sharekhan Account opening form (I am the franchisee of the same). But I can’t validate each point here on this platform as it will be a big reply. Instead, I suggest you to personally look for Sharekhan Account Opening Form by visiting your nearest branch then decide yourself. Please have your demat account with reputed broker.

  13. Useful information
    Why do they have 30+ pages documents. It should be a simple form. I had tried going through it but after few pages had slept off nicely!
    I have heard that at times brokers buy and sell from person’s account giving promise of good returns. Person gives login and password which is used by broker to buy and sell rather trade the shares .

    1. Basavaraj Tonagatti

      bemoneyware-It is now totally simplified when you compare previous versions. Long back they used to have around 45-50 signatures which now reduced to less than 20 signatures. Promising guaranteed return from equity is rampant to lure uneducated investors. For your information, even if client does not share the login and password, they can trade on behalf of clients. The only caution one need to take care is to check the report which they send to client’s registered mail id and now I think NSE started sending messages once some transaction is done. So that makes sense.

      I recently met a client where one franchisee of reputed stock broking firm lured that lady of monthly return Rs.9,000 if she invest Rs.3,00,000. After few months payout he suddenly stopped to pay. When she checked her account, she found that he traded daily traded from her money. Balance at end was around Rs.60,000. The surprising thing is, he paid that Rs.9,000 payout to her from this Rs.3,00,000 principal but not from any profit. Because the invested money never gone to positive way. Finally after lot of struggle she got back around Rs.2,50,000.

  14. Dear Basu,
    Please elaborate what you mean by “Transfer of funds from client’s bank account ” does that mean the broker can access our bank account and transfer the funds ?. If yes, in what PoA the broker has this power, I mean specific or general.

    Thank you for your guidance as always.

    1. Basavaraj Tonagatti

      Sunil-Please look at the points which I explained above. He can transfer funds only in case of any trading obligation from your end, to recover any outstanding account fees or to meet the obligations for the investments you subscribed like mutual funds. Apart from these he can’t access your account and transfer fund as his wish. The above access will come under specific power of attorney.

      1. Dear Basu,
        I agree with you points .i.e broker access ” client saving account to recover any outstanding account fees or to meet the obligations for the investments you subscribed like mutual funds”. But it does not gurantee that the broker would access clients saving account only during these conditions, these are conditions laid in the PoA, what is the gurantee that broker will always stick to it and does not do any fraudulent activity. And again at the end of the day we have to hope that our broker does not do such things, verify our DP statemetns regulartly etc.

        1. Basavaraj Tonagatti

          Sunil-Those facilities were given to broker considering the risk involved in online trading by the client. But at the same time when one look at client perspective, it seems too much liberty to broker. So as you told above solution lies in verifying our account daily and check the statement we receive from the broker on a regular basis.

        1. Basavaraj Tonagatti

          Raj-That’s a great responsibility from my end to deliver a good content every time too and will meet your expectation always 🙂

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