How do I safeguard my Demat Account with Power of Attorney to Broker?

When you give Power of Attorney (PoA) of the Demat Account to your broker, you give access to him to make any transaction on your behalf. This is a risky proposition. The PoA is a critical component in online stock trading. It offers convenient hassle free transactions between your trading and demat account.

But there are few ways to safeguard your PoA enabled demat account:

1. If you are not doing delivery trades, you don’t need a demat account. Even if you have a demat account, you don’t have to give power of attorney to the broker.
2. The Broker (depository participant) and CDSL/NSDL (depository) both send instant alerts and statements for all demat transactions through email and SMS. You should check them carefully every time.
3. You can open as many demat accounts you want. If you do not want to give access to certain holdings to your broker, you could open another detail account (with the same or another broker) and do not give PoA for this new account. The shares can be deposited by you or your broker in this account but they cannot be withdrawn.
4. Revoke the PoA if you do not need. Close the demat account if you do not need it.

Get more detail about Demat PoA:

• Power of Attorney for Demat Account - Explained with Examples and FAQs
• How do I safeguard my Demat Account with Power of Attorney to Broker?
• Are there different types of Power of Attorney?
• What is the validity of my Power of Attorney for demat account?
• Are there any charges associated with Demat Power of Attorney?
• Does broker allows time bound Power of Attorney for Demat Account?
• Should Power of Attorney be printed on the Stamp Paper?
• Can I sign Power of Attorney online?
• Can a Broker misuse the Power of Attorney?
• Can a Broker withdraw money from my linked bank account using the Power of Attorney I gave?
• Can I use Broker Pool Demat Account to keep my share and do not give Power of Attorney?
• Can I trade in Futures and Options without Power of Attorney to my Demat account?
• My signed Power of Attorney is still in courier. Can I still trade?