Comment on On the Karvy Issue
commented on
17 Jun 2020, 02:06 AM
Hi Matti,
Just wanted some clarifications. Clause 14 of your PoA states, “14. To do all such acts/processes as may be necessary to effect the subscription/purchase/redemption or any other such transaction, in any securities/scrips and/or investment product, for which services are availed from Zerodha.” Is this not broad enough to allow you to debit shares from clients accounts without their instructions? Becuase the words any other such transactions using the legal maxim ejusdem generis could include sale of securities as well, right? Even if that is not true, should there not be another qualifier here which states that any such transactions should be done ONLY on the clients instructions?
Similar questions for clause 19 “19. To do all other acts and things as may be necessary to affect the
subscriptions/purchase/redemption or any other transaction in any investment Product for which services are availed from Zerodha.” Can we add qualifiers to these two to clearly state that any acts done by Zerodha should be based on the client’s instructions?
Clause 21 states” 21. In case of any erroneous transfer done by attorney, the attorney may return the same to my account as soon it comes to their notice.” Shouldn’t the word MAY be changed to SHALL? Because otherwise the onus of rectifying erroneous transfers can not be certain.
Clause 23 states “23.To authorize Zerodha to transfer the securities to any of the demat accounts of Zerodha as mentioned in Annexure B.” Can this not be further qualified to mean transfer to demat accounts in Annexure B ONLY for XYZ certain purposes ONLY?
Lastly, could you please tell us for the community at large, what are the remedies/implications of brokers acting beyond the power of attorney? Sorry I know this is a long message. Would really appreciate if you could revert and help out. This may sound a little paranoid but post the Karvy episode, I’ve been scared a lot about anything being possible. I definitely trust Zerodha, but just want to make this as fool proof as possible. Hope you’d understand.
With regards,