CIRCULAR
SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2022/137 October 06, 2022
To,
All Depositories
All Recognised Stock Exchanges
Dear Sir/Madam,
Sub: Execution of ‘Demat Debit and Pledge Instruction’ (DDPI) for transfer of
securities towards deliveries / settlement obligations and pledging / re-
pledging of securities - Clarification
1. SEBI vide circular no. SEBI/HO/MIRSD/DoP/P/CIR/2022/44 dated April 04, 2022,
issued guidelines regarding execution of ‘Demat Debit and Pledge Instruction’
(DDPI) for transfer of securities towards deliveries / settlement obligations and
pledging / re-pledging of securities.
2. In view of the representations by and consultations with Broker Associations and
Depositories, it has been decided to widen the scope of DDPI to include:
2.1. Mutual Fund transactions being executed on Stock Exchange order entry
platforms; and
2.2. Tendering shares in open offers through Stock Exchange platforms.
3. Accordingly, the following amendments are being made to the said Circular:
3.1. Para 3 shall stand modified as under:
“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.
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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.”
3.2. Para 8 shall stand modified as under:
“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.”
3.3. Para 9 shall stand modified as under:
“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:
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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.”
4. Annexure-A of the SEBI circular dated April 04, 2022 is modified to the extent of
para 3.1 above. All other provisions specified in SEBI circular dated April 04, 2022
shall continue to remain applicable.
5. This circular shall be applicable from November 18, 2022.
6. Stock Exchanges and Depositories are directed to:
6.1. bring the provisions of this circular to the notice of their members /
participants and also disseminate the same on their websites;
6.2. ensure that existing clients are made aware of the availability of facility for
execution of DDPI, through letters / SMS / emails; and
6.3. make necessary amendments to the relevant Bye-laws, Rules and
Regulations for the implementation of the above decision.
7. This circular is issued in exercise of the powers conferred under Section 11(1) of
the Securities and Exchange Board of India Act, 1992 and Section 19 of the
Depositories Act, 1996, to protect the interests of investors in securities and to
promote the development of and to regulate the securities markets.
Yours faithfully
Aradhana Verma
Deputy General Manager
Tel. No: 022 26449633
aradhanad@sebi.gov.in
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Annexure-A
Demat Debit and Pledge Instruction
S.No. Purpose Signature of Client *
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
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. Mutual Fund transactions being executed on
Stock Exchange order entry platforms
4. Tendering shares in open offers through
Stock Exchange platforms
* the same may be signed physically against each purpose of DDPI. The same may
also be eSigned. In case of eSign, client shall be given an option for choosing the
specific purpose(s) of DDPI.
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