Update to CDSL’s TPIN authorisation process for selling stocks from 20/02/2021

In May 2020, the depositories introduced a new process for clients to authorise the debit of securities from their demat accounts against a delivery sale transaction by entering a TPIN. The new process made a physical Power of Attorney for the demat account, in favour of the broker, unnecessary, thus making the account opening and operating process simpler and more secure.

SEBI has now advised the depositories to further strengthen this process by mandating an OTP at the time of authorisation in addition to the existing TPIN. All brokers have been asked to take this process live from Saturday, February 20, 2021 as per this circular by CDSL. As such, the following changes will be effected for all non PoA accounts:

  1. In addition to TPIN, an OTP will have to be entered at the time of authorising the stocks for debit. The OTP will be sent by CDSL to your registered email address and mobile number.

Authorisation before a trade

  1. Up until now, the authorisation remained valid for 90 days, which meant that once the stocks were authorized for debit, you needn’t authorise the same stocks (by visiting the CDSL website) for the next 90 days. From February 20, 2021, the authorisation shall stay valid for one trading day only. This means that each day you intend to sell a stock, you’ll be redirected to CDSL’s webpage where you’ll need to enter the TPIN and OTP in order to authorise the debit.In the event that CDSL isn’t able to send OTP for any reason, you can still carry out the sale transaction. You will be required to authorise the debit of the sale transaction after carrying out the trade before 5:00 PM on the day of the trade. To do so, you’ll have to click on the ‘Authorisation’ button on the Holdings page on Kite. If you do not authorise the debit after carrying out the sale, the transaction will result in short delivery and subsequent auction and penalty. You can read more about the auction process here.

Post-trade authorisation in case of CDSL OTP failure or GTT sell orders

  1. Impact on GTT and equity SIP sell orders: Since the new process requires an OTP for the transaction to be completed successfully, you’ll need to authorise the debit with TPIN and OTP before 5:00 PM on the day the GTT or SIP order is executed after the order is executed. You will receive an email and a notification on Kite confirming that the GTT was triggered for you to authorise your stocks in a timely manner. If you do not authorise the debit after the GTT or SIP sell order is executed, the transaction will result in short delivery, auction and penalty.

Note: You will have to authorise your stocks with OTP again even if you have previously authorised the sale of stocks with just TPIN from February 20, 2021**.**

While we do understand that the new process may seem cumbersome in some aspects, please keep in mind that these changes have been suggested by SEBI with the interest of keeping your investments secure. In light of these changes, it would also be prudent for you to have your latest, and active, mobile number and email address registered with CDSL. If you have changed your number or email ID and haven’t updated it with us, please do so at the earliest on Console to be able to receive the OTP required to authorise the sale of stocks.

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Does this require ; even if we have given the POA to the broker?

No, this is only for users who haven’t given PoA.

Is giving out POA to brokerage firms riskier for clients?

Is this CDSL’s TPIN authorisation process is applied for selling the stocks from the holdings…

Like,
In intraday, if we squareoff (sell) for a long position… And… For shorting (sell) for a short position… we have to go through this authorisation process??

Is CNC we can’t short sell…

So is this process for selling is only for selling shares from holding???

Please clarify my doubts
:pray::pray::pray::pray:

@ShubhS9 @siva

I was curious about the 5:00 PM cut-off time. Is this cut-off time somehow related to the Early Payin process?

Yes, the CDSL TPIN is required only while selling shares from your holdings.

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  1. Will the GTT sell order be triggered and placed to the exchange even without TPIN authorization (TPIN we authorize and keep for 90days now but with the new rule it is valid for one day only)

  2. Once the sell order is placed it will show in Positions tab of Portfolio of kite mobile/web as SOLD HOLDING - so will this have some option to authorize the sell order with TPIN/OTP to be done before 5pm

  3. If you miss the notification on Kite then is the email link the only option to authorize the sell order if the Point 2 is also not made available in Kite

Suppose, I place order to sell shares from holding without authorisation.

Will I redirect to cdsl to authorise shares. Or my shares will be sold and I have to authorise shares before 5 PM manually.

You can’t if you are non poa, recommend you to try it once by placing AMOs if you are non poa.

For non POA accounts needing TPIN (says daily once &no longer 90 days )+ mobile OTP :

My idea of trying this new cumbersome sell procudure

  1. Iam going to try folowing both methods on Monday at Zerodha

A.) try AMO method at 8am: Place sell order my CNC holdings as CNC SELL & see how the CDSL pop up behaves /whether CDSL mobile phone OTP arrives instantly & CNC SELL gets executed later !

B Sell holdings as MIS with additional margin ofcourse (with out any tpin+mobile otp botherations ) later try convert MIS SELL to CNC sell around 3pm aramse with out tension (if the stock does not fall back to cover my MIS SELL )
since previous buy is locked gainst MIS sold price, extra 10-20 seconds delay is not a factor.

This new rule has made selling shares too complex and cumbersome now. High chances of getting short delivery.

@siva if covered call is ITM on expiry day, will the shares not be automatically sold now? How will that work now?

@siva how to check whether one has poa or non-poa account? this would help figure out the need to generate CDSL TPIN …

Easy way would be place cnc sell order, if it asks for Tpin then it is non poa or even one can check on holdings page and it shows as below for non poa.

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Tpin +mobile OTP working smoothly.
Today I placed CNC sell order in Zerodha around 8am as AMO. cdsl popup worked smoothly. First enter Tpin, then it comes back for mobile pin otp (in the mean time otp has already arrived in mobile)
In another broker placed CNC sell order during market hours ,worked smoothly.

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i have no holding but i have activated tpin in the past now i cant see if i am poa or non poa. please tell me what to do.
i think i had submitted the poa in the past.

You can check my above reply how to know if account is poa or not.

Yeah but i cant see any authorize option in holdings also i have no stocks to sell. So what should i do

Can check your cmr copy or just try placing amo sell limit order to know if your account is poa or non poa. Non poa will ask for tpin for alos also.