PTI

SEBI issues draft guidelines for Power of Attorney

Tue, Nov 3 10:50 PM

Mumbai, Nov 3 (PTI) Market regulator SEBI today issued draft guidelines for incorporating conditions or clauses in the Power of Attorney given by clients to their stock brokers and invited comments from the public by November 30. "The proposed guidelines have been finalised as per the discussions between the representatives of stock exchanges, depositories, brokers, investors associations and the deliberations in the meeting of Secondary Market Advisory Committee (SMAC) of SEBI," the regulator said in a statement.

As per the discussion paper, the Power of Attorney (PoA) would not be executed in the name of any employee.

or depository participant, but only in the name of the concerned entity.

The PoA should be executed and stamped as per the law prevailing in the place where the PoA is executed or the place where the PoA is kept as a record, SEBI suggested. The PoA would authorise the stock broker or depository participant to send SMS alerts regarding broking transactions or debits to the beneficial owner accounts of the client, and it should provide for a clause for settlement of disputes arising out of the operations of the PoA, it said.

In case of merger or demerger of the stock broker with another entity, if the PoA does not provide the authority to continue the rights, the new stock broker or depository participant would have to obtain a written confirmation from the clients to continue to use the PoA..

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