What is POA in Demat Account? Benefits, Risks & Modern Alternatives

What is POA (Power of Attorney) in a Demat Account? Should You Enable It?

When opening a Demat account, many brokers ask you to sign a Power of Attorney (POA) document. But what exactly is a POA in this context, and do you really need it?

In this blog, we’ll break down the meaning, purpose, pros, and risks of POA in a Demat account—and help you decide if it’s necessary for your trading experience.

What is POA in a Demat Account?

POA (Power of Attorney) is a legal authorization that allows your broker (Depository Participant) to debit securities from your Demat account when you sell them.

Without a POA:

• You need to approve each sell transaction manually (via e-DIS or OTP)

• Some features may be limited or slower

Why Brokers Ask for POA

Brokers use POA to:

• Execute sell orders on your behalf instantly

• Settle trades automatically without additional steps

• Offer smoother intraday and F&O trading experience

Is POA Mandatory?

❌ No, POA is not mandatory to open or use a Demat account.

You can trade without POA by using:

• e-DIS (electronic delivery instruction slip)

• TPIN-based authorization (especially for CDSL users)

However, some legacy brokers may still insist on POA for full functionality.

Types of POA in Demat

1. Full POA – Gives broker authority to debit/credit securities, pledge, close account, etc. (⚠️ Avoid this)

2. Limited POA – Only allows debit of securities for trades (✅ Safer option)

Pros of Enabling POA

✅ Faster sell order execution

✅ Auto-settlement of trades

✅ No repeated authorizations

✅ Seamless F&O and intraday activity

Cons and Risks of POA

❌ Risk of misuse if broker is unethical

❌ Loss of control over share movements

❌ May allow broader access than needed

❌ Legal complications in case of disputes

How to Revoke POA

• Write a letter/email to your broker requesting cancellation

• Ensure no pending sell orders exist

• Broker will acknowledge and restrict POA-based transactions

One Solution’s Approach to POA

At One Solution, we prioritize investor safety and transparency:

✔ POA is optional

✔ We support e-DIS and TPIN-based trading

✔ If POA is submitted, it’s limited and never misused

✔ You stay in full control of your portfolio

✔ 100% online authorization available

Final Thoughts

POA can make trading smoother—but it’s not essential. If you prefer manual control, modern options like e-DIS and TPIN give you both security and flexibility. With One Solution, you get to choose the path that suits your investing style.

Open a free Demat account today—with or without POA—with One Solution.