What is DDPI Full Form And Difference Between DDPI and POA

To protect the rights of investors in the stock market, the Securities and Exchange Board of India (SEBI) had introduced a new document named Demat Debit and Pledge Instruction (DDPI) in place of POA (Power of Attorney) which will protect the rights of investors from September 1, 2022. Effective for protection. Let us know what is Demat Debit and Pledge Instruction (DDPI), what is the difference between DDPI and POA and how it protects the rights of investors in the financial markets.

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What is DDPI? And DDPI full form

DDPI full form 'Demat Debit and Pledge Instruction' which is a part of the dematerialization (Demat) system used for buying and selling of shares in the stock market. When an investor buys or sells a share in the stock market from his demat account, the investor needs to initiate DDPI to authorize debit-credit of specified quantity to the shares held in his account.

Apart from this, DDPI is also used by investors to pledge their securities as collateral for loans or other financial transactions. Which provides flexibility and security in managing their share holdings. Before the DDPI came into effect (September 1, 2022), the Securities and Exchange Board of India used to use POA (Power of Attorney) to protect the rights of investors.

Difference between DDPI and POA?

There are several main differences between the differences in DDPI and POA. Which can be understood through the following points.

• DDPI facilitates ownership of any securities pledged. Whereas POA only provides the broker access to its securities.
• Investors have less exposure to risk by owning securities. But POA increases the risk of ownership risks of broker securities.
• The strict regulatory framework of SEBI ensures investor protection in DDPI. On the contrary, due to lack of strong regulatory framework of POA, there is more possibility of misuse by brokers from investors.
• Currently, DDPI has high-speed operations due to digital process; in POA, due to absence of digital process, operations were slow.
• It has become easier to cancel pledges from online platforms due to the digital process. Due to lack of digital process in POA, there was delay in paperwork.
• The online processes of DDPI have increased the efficiency of work by reducing the time consumption of pledge requests. On the contrary, due to paper documents in POA, there was lack of time and efficiency of work.

How does DDPI protect the rights of investors in the financial markets.

When an investor buys or sells shares from his Demat Account, DDPI is used to authorize the debit of a specified quantity of shares held by the investor in his account, thus keeping the brokers away from access and misuse of the investors' accounts. Can't do it.

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