CDSL introduces new PIN-based pre-authorisation for selling stocks

CDSL had earlier introduced e-DIS (Electronic delivery instruction slip) to get over the issues with giving Power of Attorney (PoA) to brokers. PoA allows the broker to debit shares from your demat account when you choose to sell shares. But the PoA was fraught with risks as the broker had full access to your shares in the demat, and could utilize it for fraudulent purposes.
 
The e-DIS process was safer as there was no PoA involved. In e-DIS, the customer could now enter a PIN number to authorize the broker to debit shares from the demat account before placing a cash-and-carry (CNC) sell order for their stocks, writes Zerodha.
 
However, there was a small issue in this method; the PIN/password entered was on the broker’s trading platform and CDSL didn’t have any way to validate if the brokerage firm was allowing sell transactions (debiting demat account) only after the right PIN was entered. 
 
In the case of POA or physical DIS, CDSL has an explicit signed instruction from the client, but not in the case of e-DIS.
 
 So they have made a change in their e-DIS process and will be applicable from June 1, 2020, for all customers who have opened an account without giving POA. You’ll now have to use the CDSL TPIN instead of your brokers PIN and authorize them to be sold at CDSL before placing a selling order on Kite.
 
The CDSL TPIN is sent to the client’s registered mobile and email address (from [email protected]) with CDSL. Make sure to confirm that the correct email address and mobile are updated at CDSL by checking your profile in trading account. Do remember this TPIN, as it would be required to authorise the sale of stocks with CDSL before you can place an order.
 
When you place a CNC order on the trading platform, you will be asked by CDSL to authorize the sale on the CDSL website
 
Click on “manage authorisations” on the “Authorise sell transaction” screen to select stocks that you wish to authorise for selling. It is best to have all your stock holdings authorised to sell, so you don’t have to do this process multiple times. This authorisation is valid for a maximum of 90 days, after which you will have to go through this authorisation process once again.
 
Clicking on “Continue to CDSL” opens the below CDSL page with a list of all the stocks that you have selected to be authorised. Enter your CDSL TPIN to verify and validate.
 
Now you can place the sell order. You would not need to go through this authorisation process once again unless you purchase more stocks that you intend to sell.
 
You can also authorise the sale of your stocks by clicking on “Authorisation” on the holdings page during off-market hours.
 

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