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2020 (1) TMI 679 - Board - SEBIPledging of securities of unpaid clients required taking of "explicit authorization" by the stock broker from each such client and in respect of each such pledging - HELD THAT:- PoA given by the client to the broker can be used for the purpose of pledging in favour of the stock broker, "only" for the purposes of meeting the margin requirements. The authorization claimed under said PoA by the Representor is not the "explicit authorization" of the client, as referred to under SEBI circular dated September 26, 2016 and of which record is also required to be maintained by the stock broker of all such authorisations. Representor, in para 18 (e) of its representation dated December 19, 2019 has prayed that in respect of partly/unpaid clients, KSBL be directed to issue five days notice to the clients or the Representor be allowed to issue 5 days notice to clients to enable the clients to redeem the pledged shares by making payment of the corresponding outstanding indebtedness, failing which the Representor be permitted to invoke the pledge on shares. If the Representor is able to show proof of authorization in respect of securities having value of ₹ 13.69 crores belonging to unpaid clients, such securities can be released to the Representor after following the above procedure under supervision of NSEIL.
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