If you are opening a demat account and a form asks you to grant your broker a Power of Attorney (POA), pause. After a string of broker scandals where client shares were misused, SEBI scrapped the broad POA model and replaced it with a tightly-scoped instruction called the DDPI, effective 18 November 2022. Even the DDPI is optional. Here is what each one actually lets your broker do, and how to keep control of your own shares.
Why SEBI killed the broad demat POA
Under the old system, brokers asked clients to sign a Power of Attorney so the broker could move shares out of the demat account to settle sales. The problem was scope: a loosely-worded POA could let a broker do far more than settle your trades — including pledging client securities for the broker's own borrowing. That is precisely what went wrong in high-profile broker defaults. SEBI's fix was to remove the POA from the standard account-opening flow entirely.
What is DDPI, and what can it actually do?
DDPI stands for Demat Debit and Pledge Instruction. It is a narrow authorisation that lets your broker do only four specific things — nothing else:
| DDPI permits the broker to… | So that… |
|---|---|
| Transfer/deliver shares to the exchange when you sell | Your sell order settles without you approving each delivery |
| Pledge / re-pledge securities for margin | You can pledge holdings to get margin for trading |
| Tender shares in open offers via the exchange | You can participate in buybacks / open offers smoothly |
| Process mutual fund transactions on exchange platforms | Exchange-routed MF redemptions settle |
That is the entire list. A DDPI cannot be used to move your shares anywhere of the broker's choosing, and it cannot pledge your securities for the broker's own funding. It is a scalpel where the POA was a sledgehammer.
DDPI vs POA at a glance
| Feature | Old POA | DDPI (2026) |
|---|---|---|
| Scope | Broad, open to interpretation | Four defined functions only |
| Risk of misuse | High (historical scandals) | Low — narrowly bounded |
| Mandatory? | Often pushed at onboarding | Optional — broker cannot compel it |
| Status for new accounts | Discontinued | Standard option since 18 Nov 2022 |
| Existing POAs | Those submitted before 1 Sep 2022 stay valid | — |
Is DDPI mandatory? No.
SEBI was explicit: a broker or depository participant cannot compel you to sign a DDPI, and cannot deny you services if you refuse. If you skip DDPI, you simply authorise each sale individually using the OTP-based alternative below. Many active traders opt for DDPI for convenience; control-focused or occasional investors are perfectly fine without it.
DDPI vs e-DIS / TPIN — the trade-off
If you do not give DDPI, you sell shares using e-DIS (electronic Delivery Instruction Slip), authorised with a CDSL TPIN + OTP (or the NSDL equivalent) each time you place a sell order:
- DDPI — one-time authorisation; sell orders go through without an OTP each time. Most convenient; relies on the narrow, SEBI-bounded permission.
- e-DIS / TPIN-OTP — you approve every single sale with an OTP. Maximum control; mildly inconvenient if you trade often, and occasionally OTP delays can hold up a time-sensitive sale.
Neither is "safer" in the misuse sense any more — DDPI's scope is now so narrow that the old POA fear no longer applies. Choose DDPI for convenience, e-DIS if you prefer to physically approve each exit. New to all this? Start with our walkthrough on how to open a demat account online, and compare brokers in our best demat accounts guide.
How to activate or revoke DDPI
Activate: most brokers offer DDPI activation from the account/profile section, e-signed with Aadhaar OTP; some still require a physical signed DDPI form couriered in. There is typically a small one-time stamp/processing charge.
Revoke: you can revoke a DDPI at any time by writing to your broker/DP; after revocation you fall back to e-DIS/TPIN authorisation for sales. Revocation does not affect shares already in your account.
Bottom line: you are not handing your broker the keys to your portfolio. The broad POA is gone; the DDPI that replaced it does four bounded things and is optional. Understand the two routes, pick the one that fits how often you trade, and never sign a blanket authorisation no one can explain.
Frequently Asked Questions
Is DDPI mandatory to open or use a demat account?
No. SEBI has clearly stated that brokers and depository participants cannot compel you to sign a DDPI, nor deny you services if you refuse. If you do not give DDPI, you authorise each share sale individually using e-DIS with a CDSL TPIN and OTP (or the NSDL equivalent). DDPI is offered for convenience, not as a requirement.
What is the difference between DDPI and the old POA?
The old Power of Attorney was broad and open to interpretation, and was misused in some broker defaults to pledge client securities. DDPI, which replaced it for new accounts from 18 November 2022, permits the broker to do only four specific things: deliver shares to the exchange when you sell, pledge or re-pledge securities for your margin, tender shares in open offers, and process exchange-routed mutual fund transactions. It cannot be used to move your shares arbitrarily or fund the broker.
Is DDPI safe?
Yes, within its narrow scope. Unlike the old POA, a DDPI is bounded to four defined functions and cannot be used to pledge your securities for the broker's own borrowing. The misuse risk that prompted SEBI to scrap the broad POA does not apply to DDPI. If you still prefer to approve every sale yourself, use e-DIS with TPIN and OTP instead.
What happens if I do not sign a DDPI?
You can still buy and sell normally. For every sale, you authorise the delivery of shares using e-DIS, entering your CDSL TPIN and an OTP at the time of the sell order. This gives you maximum control over each transaction, at the cost of a small extra step each time you sell.
Do existing POAs given before 2022 still work?
Yes. POAs submitted before 1 September 2022 remain valid and do not need to be replaced with a DDPI. The change applies to new authorisations. You can, however, revoke an old POA and switch to DDPI or e-DIS if you prefer the narrower arrangement.
Sources: SEBI circular on execution of Demat Debit and Pledge Instruction (DDPI), effective 18 November 2022, and subsequent clarifications; CDSL / NSDL e-DIS and TPIN guidance. Confirm activation steps and charges with your broker. Current as of 2026.