What is DDPI and why is it needed?
Demat Debit and Pledge Instruction (DDPI) is a
document that allows a broker to debit the securities from the client’s demat
account and deliver them to the exchange. SEBI introduced DDPI which limits
debiting shares from a client’s account only if the client places a sell trade.
DDPI replaced POA on November 19, 2022. Here’s why brokers or DPs need
Demat Debit and Pledge Instruction:
To transfer securities from the Demat account to
the stock exchange when a sell trade is placed
To pledge or re-pledge securities in the Demat
account for margin trading.
To transfer shares from demat account when the investor participates in a tender offer like takeover,
buyback or delisting.
To debit mutual fund units from the Demat account
when they are sold.