Securities and Exchange Board of India (SEBI) has decided to extend the implementing norms about power of attorney given by clients to trade or clear members date to 1st August 2020. These norms will help in curbing the misuse of this power enjoyed by trade and clear members. The guidelines for margin obligations to be given by pledge and re-pledge in the depository system were specified in February 2020.
Other than the title of securities to the client collateral Demat account of the trading manager/ clearing manager for margin purposes will not be permitted. If a client gives power of attorney in favour of trade or clear manager, the power of attorney will not be the same as the collection of margin by trade or clear manager in respect of securities held in the Demat account of the client.
All these guidelines and norms were supposed to come in effect from 1st June 2020. However due to the ongoing coronavirus pandemic the date has been extended to 1st August 2020.
A circular issued yesterday by SEBI said, “…it has been decided to extend the implementation date of the … provision to August 01, 2020, and align it with the implementation of the mechanism of pledge re-pledge through the Depository system.”
