The Securities and Exchange Board of India (SEBI) on April 04, 2022 has issued a circular on Execution of ‘Demat Debit and Pledge Instruction’ (DDPI) for transfer of securities towards deliveries / settlement obligations and pledging / repledging of securities to make the process more transparent and simpler, the two conditions as specified in paragraphs 1.2.1 and 1.2.2 shall be made part of a separate document viz. ‘Demat Debit and Pledge Instruction’ (DDPI) (Annexure-A), under which the clients shall explicitly agree to authorize the stock broker/stock broker and depository participant to access their BO account for the limited purpose of meeting pay-in obligations for settlement of trades executed by them.
The Highlights of the circular are as followed:
• The client may use the DDPI or opt to complete the settlement by issuing physical Delivery Instruction Slip (DIS) or electronic Delivery Instruction Slip (eDIS) themselves. Hence, with the implementation of this circular, PoA shall no longer be executed for the conditions specified in paragraph 1.2.1 and 1.2.2.
• For the execution of the DDPI for fulfilling delivery / settlement obligations, prior to executing actual transfer of securities based on details provided by stock broker/stock broker and depository participant, the Depositories shall ensure matching and confirming the transfer of securities with client-wise net delivery obligation arising from the trade executed on the exchange, as provided by the Clearing Corporation to Depositories for each settlement date.
• Securities transferred on the basis of the DDPI provided by the client shall be credited only to client’s trading member pool account. The DDPI provided by the client shall be registered in the demat account of the client by TM /CM. Stock Exchanges and Depositories shall ensure that stock broker/stock broker and depository participant providing DDPI facility, has enabled its clients to revoke / cancel the DDPI provided by them.
• Stock Exchanges and Depositories are directed to:
o Bring the provisions of this circular to the notice of their members / participants and also disseminate the same on their websites;
o Ensure that existing clients are made aware of the availability of facility for execution of DDPI, through letters / SMS / emails; and
o Make necessary amendments to the relevant Bye-laws, Rules and Regulations for the implementation of the above decision.
[Circular No. SEBI/HO/MIRSD/DoP/P/CIR/2022/44]
