NSE Advisory Clients : Power of Attorney with Brokerage Houses

NSE has sprung in action post fiasco by Karvy broking where it misused clients' power of attorney (POA) and subsequent to that it has issued an advisory for all clients which you must go through as it is in your interest to be forewarned. The email received from NSE for the clients is as appended below:


Dear Investors,


In view of the recent developments in the securities market, we advise the following:


• Ensure that the pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.

• Be careful while executing the PoA (Power of Attorney) - specify all the rights that the stockbroker can exercise and the timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.

• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Ensure that you receive Contract Notes within 24 hours of your trades and Statement of Account at least once in a quarter from your Stock Broker

• Please note that securities provided by you towards margin are not permitted to be pledged by your Stock Broker for raising funds.

• If you have opted for a running account, please ensure that the stockbroker settles your account regularly and in any case not later than 90 days (or 30 days if you have opted for 30 days settlement).

• Do not keep funds and securities idle with the Stock Broker.

• Regularly login into your account to verify balances and verify the Demat statement received from depositories for correctness.

• Check messages sent by Exchanges on a monthly basis regarding funds and securities balances reported by the trading member and immediately raise a concern if you notice a discrepancy.

• Always keep your contact details viz Mobile Number / Email ID updated with the stockbroker. You may take up the matter with Stock Broker / Exchange if you are not receiving the messages from Exchange / Depositories regularly.

• If you observe any discrepancies in your account or settlements, immediately take up the same with your stock broker and if the Stock Broker does not respond, with the Exchange/Depositories


Thanks & Regards

National Stock Exchange of India Ltd.

It ould be better if NSE has checks and balances are in place well in time before the fiasco takes place as weeping on split milk is of no use and in India, it has become a habit to take remedial action post the bad event has happened. Can we have any system where such brushing under the carpet incidences are brought to light before the world gets rogered by the aftereffect.

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