Sebi declines Karvy's plea to use PoA

New Delhi: Markets regulator Sebi has rejected Karvy Stock Broking's plea to use its clients' power of attorney (PoA) to settle trades done by them and said securities worth Rs 2,300 crore of more than 95,000 clients were illegally transferred by the broker.

After considering the facts and circumstances of the case including enormity of the prima facie violations observed against Karvy, Sebi in an order passed late night Friday said it would not be prudent to allow the use of PoA by Karvy given to it by its clients.

The markets watchdog further said clients of Karvy who seek to sell securities through the broker may do so by using electronic or physical Delivery Instruction Slip (DIS) only.

A DIS is used by sellers of securities to instruct their depository participant to debit their demat account.

The order also highlighted that Karvy, in one demat account under its name on the BSE, unauthorisedly transferred securities worth Rs 2,300 crore of more than 95,000 clients, into this account, by misusing the PoA given by its clients.