http://www.thehindubusinessline.com/2010/09/01/stories/2010090151871000.htm
*Market participants welcome SEBI move on Power of Attorney* Our Bureau Mumbai, Aug 31 SEBI has issued clarifications on the order regarding execution of power of attorney (PoA) by the client in favour of the stockbroker or stockbroker-cum-depository participant passed on April 23. The regulator stated that no broker could deny services to a client, if the client does not sign the POA. This is exempt for Internet based trading. SEBI said that transfer of securities towards settlement obligations also falls under this ambit in addition to margin/delivery obligations. Market players are positive that this move would prevent misuse of POA. Mr Prakash Diwan, Head –Institutional Equity, Networth Stock Broking said: “The tendency of brokers to misuse by overleveraging in F&O trades and sending e contract notes which many clients rarely saw was fine when things were OK. But when things went wrong, clients did not find time to protest against any particular transaction done on his behalf by a broker within the stipulated 24 hours and this caused a lot of heart burn. What ever the regulation, the only solution to this is proper compliance of KYC norms. This would ensure better comfort levels in client broker relationships. The market cannot take another scam pertaining to the retail investor, with markets near all time highs and a host of good PSU IPOs/FPOs in line.” Redemptions would also be included within the scope of PoA. For updating demat and bank account details a fresh PoA is not required. Instead, SEBI has allowed written communication to be used as annexure to an existing power of attorney. Copies of these communications can be attached to the power of attorney for verification. Request for revocation of PoA is not allowed for trades that have occurred prior to the request. Brokers have been advised to ensure that the power of attorney revocation request should be dated and timed so that a proper audit trail can be maintained. Clients with credit balances are miffed at misuse. Mr Kishor Ostwal, CMD, CNI Research, said “Investors started feeling the heat when brokers misused the POA to use credit balances in clients' accounts to access stocks and sell them to honour their obligation under a margin call, thanks to a significant correction. There are more than 1,000 such cases pending before the exchanges and SEBI and it is a welcome move by SEBI given the fact that a margin call gives only a half-an-hour leeway to replenish one's margin account.” Finally, the PoA cannot be misused to facilitate off-market trades between parties other than the ones mentioned in the PoA. -- For Anything related with Stock market be Online at http://www.niftyviews.com/ Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234 FOR TRIAL STOCK/NIFTY/OPTION CALLS You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group. To post to this group, send an email to [email protected] To unsubscribe email [email protected] for more info visit http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB . This is Not a Spam Mail. Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture."
