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NSE warns investors on PoA with stock brokers
The National Stock Exchange on Monday advised investors to be careful while executing Power of Attorney (PoA) with stock brokers and specify all the rights that brokers can exercise on their behalf.
By
migrator
migrator
New Delhi
The latest communication comes against the backdrop of Karvy Stock Broking Ltd’s unauthorised transferring securities worth Rs 2,300 crore of more than 95,000 clients, into its account, by misusing the PoA given by its clients. On November 22, Sebi barred Karvy from taking new clients in respect of its stock broking activities and also prevented it from using the PoA given by clients after the broker was found to have allegedly misused clients’ securities.
The leading bourse has asked investors “to be careful while executing the PoA (Power of Attorney) - specify all the rights that the stock broker can exercise and time frame for which PoA is valid.” Further, investors have been asked to register for online applications provided by depositories for online delivery of securities as an alternative to PoA.
PoA is not a mandatory requirement as per markets regulator Sebi or the exchanges, it noted. Investors need to ensure that contract notes are received within 24 hours of trades and statement of account at least once in a quarter from the brokers.
Cautioning investors against keeping funds and securities idle with a broker, the exchange said securities provided by them towards margin should not be permitted to be pledged by the brokers for raising funds.
“If investors have opted for running account, please ensure that the stock broker settles your account regularly and in any case not later than 90 days (or 30 days if you have opted for 30 days settlement),” the bourse said.
Also, investors have been asked to regularly login into their accounts to verify balances and demat statements received from depositories as well as check messages sent by bourses on a monthly basis regarding funds and securities balances reported by the trading member.
VIL shares tank 6% after Birla’s comment
Vodafone Idea (VIL) on Monday closed 6 per cent lower on the BSE as investors reacted to the company’s Chairman Kumar Mangalam Birla’s statement that VIL will shut its business in the absence of a relief with regards to the adjusted gross revenue-based dues. Earlier in the day, VIL fell as much as 12 per cent. What further troubled the Vodafone Idea investors was Birla’s comment that there will be no further capital infusion into the venture by either the Aditya Birla Group or Vodafone.
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