SEBI cautions brokers on misuse of power of attorneys

Published on Tue, Nov 03, 2009 at 20:35 |  Source : CNBC-TV18

Updated at Wed, Nov 04, 2009 at 11:19  

Like this story, share it with millions of investors on M3
0
0
Share on Tumblr

Market regulator Securities and Exchange Board of India (SEBI) is keeping a close watch on rising investor complaints on the misuse of Power of Attorney (PoA) by brokers. The industry watchdog has put out a discussion paper and will be issuing guidelines to address the issues of unauthorised trades and misappropriation of funds. CNBC-TV18's Priyal Guliani reports.

SEBI has put out a discussion paper and has proposed that a specific PoA should be executed which basically limits the usage of the PoA. The transfer of securities held in the clients account should be for the limited use of margin and delivery obligation. Also, the usage of the funds from the client's bank account should be limited for the usage of settlement obligation.

MS Sahoo, Whole Time Member of SEBI says SEBI is currently under a discussion stage and is are planning to come out with a guideline, which will have many dos and don'ts. "It will put obligations on the brokers and depository participants to be responsible for the use of PoAs."

Other than that what SEBI is proposing is that the broker and the depository participants shall provide an original copy to the client after the execution and send SMS alerts on any transactions to the client. Also, there will be a clause included with regard to the settlement of disputes in the PoA.

  

More on Moneycontrol

Trending News

Business News

6 ways to backup mobile data
Forget the IIP: there's free cash oozing out of every pore "Forget the IIP: there's free cash oozing out of every pore "

DLF Says Macro Environment Unfavourable W/High Comm & Labour Inflation

The latest earning numbers FIRST on CNBC-TV18
Videos

Feb 10 2012, 21:39

Tulsian buys steel stocks; negative on sugar, ADAG

- in MARKET OUTLOOK

Feb 10 2012, 21:39

Truck demand sluggish; margins down 80bps: Shriram Trans

- in Results Boardroom

Interviews

Feb 10 2012, 15:43 | Source: CNBC-TV18

Growth in margins sustainable going forward: Shasun Pharma  

Feb 10 2012, 15:35 | Source: CNBC-TV18

Expect Q4 GRMs to be similar to Q3: BPCL  

Subscribe to

Moneycontrol Newsletters

Moneycontrol.com offers you a choice of various sectoral and other newsletters for FREE!

Follow moneycontrol.com