Why POA is needed in Demat Account - SAS Online

1. SASOnline India's Deep Discount Brokerage BY TRADERS FOR TRADERS ₹9/ Trade or ₹999 Monthly Unlimited

2. Why POA is needed in Demat Account? As you begin trading, you will see that a trading account requires opening of a Demat account with the broker and signing a limited purpose Power of Attorney (POA) in favor of the agent which would be the broker. Ever wondered why you need to sign a POA? Let us explain POA in detail.

3. What is POA? A power of attorney or POA is nothing but a written permission or authorization given by you to your broker to represent you, the client, or act on your behalf in personal affairs, business, or any other legal matter specified in the POA. Here you will be the principal, grantor, or donor of the POA and the broker will be your agent. But remember it is a limited purpose POA where the broker has specific rights – transfer securities to a stock exchange when you sell shares or pledge the securities with the broker for a limited time.

4. What is the need of POA? The Demat accountstores the shares that you buy – both online and offline. So, when you buy any share (of course for delivery) it goes to your Demat account. This happens automatically and does not need any interference. Problems arise when you need to sell them or maybe pledge them. An outflow of shares from your Demat account does not happen automatically when you sell them online. This is where a POA is required.

5. For the offline sale of shares, you will need to sign a delivery instruction slip that has to be submitted to the broker on time for the release of shares from your Demat account for sale. The process is cumbersome, time-consuming and has the risk of option if the instruction slip is not deposited on time. But online broking has made it all easy. That said, the broker can’t still access your Demat account unless you give them a written authority to do so. This is what the POA does. It gives the broker the authority to access your Demat account and release the shares being sold.

6. What are the benefits of POA? • Better Experience: Though not compulsory, POA helps in the smooth operation of your online trading account especially when you sell shares. It further helps in easy transactions through your account. • Cost reduction: It reduces the cost associated with the execution of a sell order, reduces the risk of auction, helps to avoid penalty expenses to stock exchange. • Increased Efficiency: POA speeds up the process and is also very convenient. Finally, you do not have to run around to submit delivery instruction slips!

7. Safety Concerns SEBI guidelines state that you should give a specific POA which is revocable (you can revoke the rights that you have given). The broker will have only specific rights – transfer securities to a stock exchange when you sell shares or pledge the securities with the broker for a limited time. The broker can in no way bar you from operating your account. So it is safe to give your broker a limited POA for accessing your Demat account.

8. About SAS Online SAS Online was founded as a Discount Brokerage company in India in 2013 by three people, Mr RK Jain - Managing Director, Shrey Jain - Founder and CEO and Siddhanth Jain - Co-founder and COO. Currently, it has 50K+ active customers, 15K cr+ daily turnover, and 1L+ daily orders which are equivalent to 1% of the Indian stock market. Awarded by NSDL best performer (account growth) in 2017, 2018 and 2019. Open a trading & demat account to start your venture in trading with SAS Online. Source: SAS Online

9. Contact SAS Online Landline Number: 011 - 4040 9 999 Email Sales: sales@sasonline.in Website: https://sasonline.in/ Address: 3Rd Floor, Building No 5 , Local Shopping Complex, Rishabh Vihar, Karkardooma, Anand Vihar, Near Karkardooma Metro Station, Delhi-110092

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