Demat Debit and Pledge Instruction (DDPI)
Demat Debit Pledge Instruction (DDPI) is a process through which you can pledge your securities in a Demat account as collateral to secure a margin and you may sell your purchase transaction without Sell Authorization or T-pin. A POA/DDPI is a document
that allows a broker to debit shares from the Demat account and deliver them to
the exchange.
To prevent misuse of
POA/DDPI, SEBI, has introduced DDPI, which limits debiting shares from a client’s
account only for secondary market transactions.
- POA/DDPI is optional & should not be insisted
upon by the stock broker for opening of the client
account.
- DDPI
-- will also be applicable for pledging or repledging of securities.
- Under DDPI, clients can explicitly agree to authorize the stock broker to
access their beneficiary ownership account for the limited purpose of meeting
pay-in obligations for settlement of trades executed by them.
- The
use of DDPI will be limited only for two purposes:
- For the transfer of securities held in the account of the client towards stock
exchange related deliveries or settlement obligations arising out of trades
executed.
- For pledging/re-pledging of securities in favour of the Trading Member(TM) for
the purpose of meeting margin requirements.
- The DDPI shall serve the same purpose of POA/DDPI and mitigate the misuse of POA/DDPI;
the client can use the DDPI or opt to complete the settlement by issuing
physical delivery Instruction Slip (DIS) or electronic Delivery Instruction
Slip (eDIS) themselves.
Refer to the SEBI link here for your reference.