Demat Debit & Pledge Instruction (DDPI) Mechanism:
The Securities and Exchange Board of India (SEBI), in its continued efforts to enhance transparency and investor protection, introduced the Demat Debit and Pledge Instruction (DDPI) mechanism through a circular dated April 4, 2022. Later, the scope of DDPI was further expanded by SEBI via another circular issued on October 6, 2022. These regulatory changes empower investors and streamline certain critical transactions within the securities market.
What is DDPI?
The Demat Debit and Pledge Instruction (DDPI) is an authorization mechanism that allows clients to give explicit consent to their stockbroker or depository participant for performing specific actions on their behalf. This eliminates the need for repeated manual intervention in certain standard transactions, improving efficiency and convenience for investors.
Activities Allowed Under DDPI
Under the DDPI framework, clients can authorize their stockbroker or depository participant to undertake the following actions:
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Transfer of Securities
Transfer securities from the client’s Beneficial Owner (BO) account to meet settlement obligations arising from trades executed on the stock exchange through the same stockbroker. -
Pledging / Re-Pledging of Securities
Facilitate pledging or re-pledging of securities in favor of the trading member (TM) or clearing member (CM) to meet margin requirements related to trades. -
Mutual Fund Transactions
Carry out mutual fund transactions using stock exchange-based order entry platforms. -
Tendering Shares in Open Offers
Enable clients to tender shares in open offers via stock exchange platforms.
Client Consent and Signature Requirements
Clients must physically sign for each specific purpose listed under DDPI. If opting for electronic signatures (eSign), clients can selectively authorize the activities they consent to. This ensures clients retain full control over their demat accounts and associated activities.
Voluntary Nature of DDPI
It’s important to note that executing a DDPI is entirely voluntary. Clients may choose to:
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Use DDPI for streamlined operations, or
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Complete settlements using traditional methods like physical Delivery Instruction Slips (DIS) or electronic DIS (eDIS).
Stockbrokers and depository participants are strictly prohibited from compelling clients to sign a DDPI or refusing service if a client chooses not to opt for DDPI.
Implementation Date
These DDPI-related guidelines became effective from November 19, 2022, and apply to all market participants and clients.
Need Help or Have Queries?
For further assistance or to raise concerns, clients can directly reach out to their stockbroker, depository participant, or contact CDSL at:
📧 helpdesk@cdslindia.com
Stay informed and take control of your investments. DDPI is designed to offer flexibility, convenience, and enhanced security while ensuring your rights as an investor are fully protected.
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