The Securities and Exchange Board of India (SEBI) addresses its concerns about Stock market brokers having signed power of attorney (POA) to debit the shares from an investor’s Demat account by introducing TPIN. The system of TPIN number generation is to authorize shares to be debited from an online Demat account. CDSL introduced this system to authorize the debit of shares from the Demat account without having to give Stock Brokers the power of Attorney.
What is TPIN?
The CDSL TPIN is a 6-digit password, which gives brokers authorisation to debit desired shares or stocks from the Demat account of the investors, thus providing an alternative to the Demat Power Of Attorney. The investors can now directly authorise sales of stocks online after generating TPIN from CDSL without involving the broker or the depository participant.
In simple terms, TPIN Is a password that effectively provides authorization to debit the shares from your Demat account without giving power of attorney to your broker. This is a much simpler and more transparent method. It also is instantaneous as it happens online.
Even though your account lies with the Depository Participant, the securities or the shares rest with the depository (CDSL Or NSDL), and now you can directly use TPIN to authorize the debit of shares.
The CDSL TPIN is generated and issued directly by CDSL to the customers. There are also provisions to reset TPIN entirely and modify it or retrieve it through a secured link in case you forget it.
TPIN is available on your trading platform as a third-party service. This way, you can avail the TPIN service directly from the trading platform, thus making TPIN more flexible.
TPIN ensures that without your approval, there cannot be any moment of shares out of your Demat Account. TPIN brings safety, security, confidence, and assurance of full control of your Online Demat Account round the clock globally.
Benefits of Having a CDSL TPIN
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How to Generate CDSL TPIN Number?
CDSL TPIN Generation is quite a simple process, and it happens in a jiffy. It can be done as follows:
1. Generation of CDSL TPIN Number
If you’ve not yet submitted your POA, you can easily pre-authorise the sale of your stocks at the start of each trading day; This will essentially help you execute your trades faster as you would not need to enter TPIN each time you place a delivery order for sale of your shares on the day.
How to change CDSL TPIN?
There could be scenarios where you would want to change your CDSL TPIN, or you want to regenerate it as you might have forgotten. You would need to repeat the exact same process as you did while generating it for the first time.
Is TPIN required for selling stocks from your Demat?
Yes, you will be required to enter the TPIN to authorize the sale of any stock from your Demat account.
What is the purpose of TPIN?
TPIN is an additional Passcode used to authorize your Demat Transactions
How many digits does TPIN have?
TPIN is a 6-digit passcode.
When POA was introduced, it needed to be given only once; it made investing simpler, investors only needed to enter the pin in the application, and the same PIN was also used for making a sell delivery order, and sometimes even that was not necessary.
Even though it was simple, it was prone to be misused. Though the CDSL TPIN has to be entered each day and could be tedious for some people, it gave better control to investors over their Demat account and the trades. As they say, “It is better to be safe than sorry.”