Is POA Necessary for Demat Account
POA (Powe of Attorney) is essentially a legal document that gives a legal authority to a broker to operate your demat account as per the agreed terms described in POA document signed by you. A trader needs to send the POA for smooth transaction of the shares.
The answer to the questions-Is POA Necessary for demat account? is no, it is not! But what will happen in case if not using a POA?
In this article we will discuss about the concept of POA, why is it required, and how you can work without it.
Requirements of POA
Whenever you want to purchase a share, you pick and choose according to your investment and then work accordingly. But when you want to purchase a share and sell it later then it is a longer process. So, if you have signed POA then it gives the stockbroker a right to sell the shares on your behalf and then transfer the fund to your trading account.
SEBI has made some significant changes in the regulations of POA, made from June 1, 2020 a trader can now give the following rights to the stock broker.
• One can transfer the shares from their own demat account to the stockbroker’s demat account in order to sell the shares.
• Shares Pledging means taking loans against the shares that one holds.
To gain a better understanding for POA click here
Now let’s understand what will happen if not using POA?
However, an alternative method called e-DIS (e-Delivery Instructions Slip) facility is available to integrate between the brokers and NSDL demat Gateway which provide facility to clients to transfer their shares.
For more details of e-DIS click here
If you do not have any account and you wish to open one visit the following links.
1. To open your account with Alice Blue
2. To open your account with Stoxkart
3. To open your account with Angel Broking
4. To open your account with Zerodha
5. To open your account with Upstock
Conclusion
POA is a legal document that makes the work easier for both the investors and the stockbrokers to sell the shares The POA is the part of the demat account form and can be signed digitally as well as on paper by the investors. Now the choice is yours whether you wish to sign it or not.
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