Selecting a broker

[faheem]

This is an old post, but I feel I should say that this statement:

@Nikhil.A

So, to operate as an online broker, the PoA is unavoidable in order to execute your sell trades. It’s like this. Whenever you sell a share, it’s a debit from your demat account. In order to execute this debit, we require power of attorney from you. Else, the other way to do this would be for you to provide us with a DIS (Delivery instruction Slip) each time you sell shares.

is incorrect, or at least incomplete. One can do the online delivery oneself, using SPEED-e (NSDL) or EASIEST (CDSL). A POA is not required. However, all brokers I’ve ever spoken to have forgotten to mention this option. And I’ve read in multiple places that if you ask brokers for this option they will refuse.

However, I spoke to three brokers here (JG Shah Fin. Con., Prabhudas Lilladher, Standard Chartered) and to my surprise none of them had a problem with it, though SC insisted that I cancel an existing POA before I could use SPEED-e. Go figure.

I think the broker POAs are inherently problematic, because the language used is excessively general and therefore very abusable. At least the ones I have read have all had very general language. Maybe the broker won’t abuse it, but do you really want to take that chance?