The Securities Exchange Board of India (SEBI) on October 06, 2022, issued a circular on the Execution of ‘Demat Debit and Pledge Instruction’ (DDPI) for the transfer of securities towards deliveries/settlement obligations and pledging/re-pledging of securities with reference to SEBI circular no. SEBI/HO/MIRSD/DoP/P/CIR/2022/44 dated April 04, 2022.
The following amendments have been stated:
• Para 3 of the above-mentioned circular has been amended:
“In order to make the process more transparent and simpler, the following conditions shall be made part of a separate document viz. ‘Demat Debit and Pledge Instruction’(DDPI)(Annexure-A):
3.1.1 Transfer of securities held in the beneficial owner accounts of the client towards Stock Exchange related deliveries/settlement obligations arising out of trades executed by clients on the Stock Exchange through the same stock broker.
3.1.2 Pledging/ re-pledging of securities in favour of trading member (TM)/ clearing member (CM) for the purpose of meeting margin requirements of the clients in connection with the trades executed by the clients on the Stock Exchange.
3.1.3 Mutual Fund transactions being executed on stock exchange order entry platforms and which shall be in compliance with SEBI circulars SEBI/HO/IMD/IMD-I DOF5/P/CIR/2021/634 dated October 04, 2021, SEBI/HO/IMD/IMD-I DOF5/P/CIR/2021/635 dated October 04, 2021, and SEBI/HO/IMD/IMD-I DOF5/P/CIR/2022/29 dated March 15, 2022, or any other circular which may be issued in this regard; and
3.1.4 Tendering shares in open offers which shall be in compliance with SEBI circular SEBI/HO/CFD/DCR-III/CIR/P/2021/615 dated August 13, 2021 or any other circular which may be issued in this regard.
The DDPI shall serve the same purpose of PoA and significantly mitigate the misuse of PoA. The use of DDPI shall be limited only for the purposes as mentioned in paragraphs 3.1.1, 3.1.2, 3.1.3 and 3.1.4.”
• Para 8 of the above-mentioned circular has been amended:
“Securities transferred on the basis of the DDPI provided by the client shall be credited to client’s TM pool account/CM pool account/demat account of clearing corporation, as the case may be. 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.”
• Para 9 of the above-mentioned circular has been amended:
“For the clients who issue the DDPI to stock broker/stock broker and depository participant, the following provisions of the SEBI circulars issued with respect to PoA shall stand replaced with DDPI:
9.1 Paragraphs 4.2.1 and 4.2.2 of SEBI circular no. SEBI/HO/MIRSD/DOP/CIR/P/2020/158 dated August 27, 2020, and Paragraphs 1(i) and 1(ii) of Annexure to the SEBI circular no. CIR/MRD/DMS/13/2010 dated April 23, 2010, with effect from September 1, 2022.
9.2 Paragraph 1(iii) to the extent applicable for Mutual Fund transactions and tendering shares in open offers, of Annexure to the SEBI circular no. CIR/MRD/DMS/13/2010 dated April 23, 2010, with effect from November 18, 2022.”
In Annexure A – Demat Debit and Pledge Instruction has been mentioned.
This circular will be applicable from November 18, 2022.
Disclaimer – Kindly find the Annexure in the provided Link/Document.
[Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2022/137]
