Understanding overnight fund portfolios

[faheem]

Hi @Investor_No_1,

@Investor_No_1

I think the problem with 3 in 1 accounts with Banks and also with stand alone brokers is that they always ask PoA and without giving that, it seems trading would be a headache with our trading account as for every trade, we will have to give a consent maybe in form of email or signed letter.

As far as I know, one has the option of using the NSDL and CDSL electronic demat share/equity delivery systems, called SPEED-e and EASIEST respectively. The only legitimate use for a POA is for a broker to take shares from your account and put it in the brokerage pool account. And those services take care of that.

This was actually mentioned in an NSDL advisory notice that was sent by email dated 5th December 2019, after the Karvy thing happened. I’ve linked to an online version which has essentially the same content as the email version. Before that I had not heard of it, or if I had I didn’t understand what it meant. Apparently these services have been in existence for a long time, but not a single broker I have ever talked to has ever mentioned the option. They always tell you that you need to sign a POA, which appears to be a lie. I’m trying to get it to work for me, but have been experiencing a fair amount of resistance from various directions. Lots of double talk. I.e. “why do you want to use this, giving us a POA makes is so much easier for everyone and ensures a smooth trading experience” . That kind of thing. And NSDL customer service also seems to be fairly dire. Big surprise. Of course the whole pandemic situation in Bombay is not helping.

I wrote about this in another thread, and someone came along (from Zerodha?), and said it was very risky for brokers to sell shares without having the shares with them. You can see my post at

Selecting a broker

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

and also see the following responses. The gentleman in question who responded to me, @Nikhil.A, also mentioned a post about “CDSL TPIN”, whatever that is, but I have not yet looked into that.

See also the thread

Some questions on PoA in the light of Karvy fiasco

Just to give a background to those who are not aware of it, here is the chain of events (feel free to point out errors) Karvy provides broking & demat services Karvy illegally transferred shares of its clients to its own demat account (or maybe the common pool account) Karvy then pledged these shares to borrow from banks/NBFCs Karvy, apparently, also sold some of these shares and transferred the proceeds to its related businesses Some clients noticed this misuse of shares and complained to SEB…

@Investor_No_1

Also, if buying/selling shares via our trading account is easy even without PoA, how can we nullify any PoA that we earlier already gave to the banks?

Ask the bank to cancel the POA. This actually happened to me. I told Standard Chartered that I wanted to use SPEED-e (they use NSDL). They were not happy, but said that if I wanted to do that, I needed to cancel my POA with them. I was fine with that, because I signed it back in 2018 without really reading and understanding it, and didn’t want a POA anyway. They made the whole process quite difficult - they also have terrible customer service - but I hope it is finally processed. Remember that you can always submit demat slips manually. That’s the ultimate fallback.