SEBI’s New Circular Regarding Execution of Demat Debit and Pledge Instruction (DDPI)

SEBI vide circular no.CIR/MRD/DMS/13/2010  dated  April  23,  2010, issued guidelines regarding the execution of Power of Attorney (PoA) by the client to the stock broker / Stock Broker and Depository Participant under the guidelines of 2010.

POA was optional for the clients to submit, stockbrokers were not allowed to insist clients to submit it.

To maintain more transparency and keep it simpler, a separate document is introduced ‘Demat Debit and Pledge Instruction’ (DDPI) (Annexure-A)

SEBI issued a new circular SEBI/HO/MIRSD/DoP/P/CIR/2022/44 on 4th April 2022 regarding the execution of ‘Demat Debit and Pledge Instruction’ (DDPI) the aim of DDPI is to replace the Power of Attorney.

The role of the Power of Attorney was to give the stockbroker and the depository participant authority to transfer securities towards deliveries/settlement obligations and pledging / re-pledging of securities of the investors.

This circular was to come into effect from July 01, 2022, but now SEBI has decided to extend the implementation date of the aforesaid circular to September 01, 2022.

From 1st September 2022, all the stock brokers can collect DDPI from their new clients instead of collecting POA. 

What will be the Role of Demat Debit and Pledge Instruction (DDPI)?

DDPI’s role will be similar to POA, DDPI will allow the stockbroker to perform the activities on behalf of the investor and make their day-to-day activity easy. 

Previously if the investor has not submitted his POA to the broker, then the broker needs to collect an Electronic delivery instruction slip (E-Dis) every time when the investor wants to perform a transaction. 

Imagining doing this every time an investor place an order was significantly burdening for both investor and the broker.

To avoid these night terrors, POA was collected.

Now DDPI will be collected in replace of POA. To ease the day-to-day activity of the investors.

Even now clients have the option to opt for DDPI or to complete settlement by using a physical Delivery Instruction  Slip  (DIS)  or electronic  Delivery  Instruction  Slip  (eDIS) themselves. 

Investors who have already submitted their POA to the stockbroker will be valid until the investor revokes it. Submission of DDPI is applicable for clients who have not submitted their POA and for the new clients who will be on-boarded from 1st September 2022.

DDPI is a new type of document that will play the same role as POA. 

DDPI will be mentioned as a part of the Voluntary Document in Annexure-1 of SEBI circular no.CIR/MIRSD/16/2011 dated August 22, 2011.

In the case of POA, investors had to submit a physical copy to the stockbroker but DDPI has changed the game.

Point to note that in DDPI investors can sign it digitally but it’s not enough. Unlike other documents in the on boarding flow. But now DDPI shall also be adequately stamped. 

Digital DDPI will help the investor to get on board easily and save time in order to send the hard copy of the POA to the broker.

The execution of DDPI is a result of the use of the authority granted under Sections 11(1) of the Securities and Exchange Board of India Act, 1992, and 19 of the Depositories Act, 1996, to safeguard the interests of investors in securities, encourage the growth of the securities markets, and regulate their operation.

Post DDPI, please follow the below guidelines for the authorization of other transactions:

Type of TransactionPost DDPI, Authorized via
Corporate Actions (Buyback, Takeovers, Delisting, etc)e-DIS
Mutual Fund & Rights Entitlement Sell transactionsCDSL TPIN & OTP


If you are a SAMCO customer and wish to submit your DDPI click here –>

Was this article helpful?

Share



Related Articles

Leave A Comment?