InvestorQ : I have given Power of Attorney (POA) to my broker for demat and that is used as margin? Has that facility also been extended to August 31?
Chandralekha Desai made post

I have given Power of Attorney (POA) to my broker for demat and that is used as margin? Has that facility also been extended to August 31?

Answer
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Mitali Bhutta answered.
4 months ago


There is a small clarification needed here. What SEBI has allowed till the end of August is that you can mark shares in your demat account for margin and don’t need to transfer the same to the pool account. But any POA given to your broker to use as margin for other positions will not be valid from June 01 onwards. SEBI has prohibited brokers from using POA to transfer client shares in equity markets. Hence, after June 01, mere holding of POA by TM/CM will not be equivalent to the collection of margin. This decision was take a couple of months back after Karvy Stock Broking had illegally pledged client shares as collateral against loans. However, there is no restriction on the use of POA, per se. POAs will continue to be valid in the broking business, the only change will be that such POAs will not valid as margin for taking positions.