Now Live: Fast Sell with DDPI (Demat Debit Pledge Instruction)

[pratik01]

Excellent work guys with the simplicity. Hardly took 50sec to complete the process.

Excellent work @PravinJ & team. You guys are rocking

[PravinJ]

Hi @thenishant, welcome to Dhan community. Nope, this INR 100 is just one-time setup charge - it sets up your account for DDPI for life-time. No additional charges on DDPI on that later, or any AMC charges on it in future.

Hope this clarifies. Thank you.

[PravinJ]

Thanks for your kind words @nx.vijay. We are happy to build Dhan and make it better with support of our users.

[PravinJ]

Thanks for your kind words @pratik01. Yes, we wanted to make it really simple and seamless.

[Swadesh]

Please update Equity Forever orders to auto cancel if any Corporate action takes place.

[Hardik]

Hello @Swadesh

We cannot cancel Forever Orders from our end on a conditional, as a Corporate Action can have a positive or negative impact for the user’s strategy/order. This is subjective to each user and each order, which is not feasible as a scalable feature.

[ekveer]

I think I have some vested interest in the improvement of Forever orders and can add my 2 cents here. I am mostly a swing trader and waited till Dhan implemented Forever orders to open my account with Dhan though it still needs lot of improvements.

Lets assume bonus/split/rights happens in a share, then I think Dhan can perform one of the below action in the best interest of the investor.

• Adjust the quantity & price accordingly
• Cancel forever orders for that scrip and inform the user about cancellation of Forever order
• Inform the user about the corporate action and the Forever order he/she has in the system

I personally trade in USA market via Schwab and they actually adjust quantity and price accordingly. Please see below on how Schwab deals with each corporate action.

Corporate Action Types

• Cash Dividends: This condition is used to keep the order price from being adjusted when a regular cash dividend event occurs. A domestic equity or ADR can be marked DNR to prevent this adjustment. All GTC buy limit and sell stops will have their price adjusted on the ex-date if the order is not marked DNR. Pink sheets and foreign securities with 5 letter symbols ending in F are not adjusted.

• Stock Dividends: All GTC buy limit and sell stop orders will have their price adjusted on ex-date, including DNR orders. The share quantity may also be adjusted based on the rules of the specific exchange, but price will always be adjusted. Pink sheets and foreign securities with 5 letter symbols ending in F are not adjusted.

• Spin-Offs: All GTC buy limit and sell stop orders will have their price adjusted on ex-date, including DNR orders. Pink sheets and foreign securities with 5 letters aren’t adjusted.

• Special Dividends: All GTC buy limit and sell stop orders will have their price adjusted on ex-date, including DNR orders. Pink sheets and foreign securities with 5 letters aren’t adjusted.

• A stock dividend is a payment to shareholders that consists of additional shares rather than cash. Src: Stock Dividend: What It Is and How It Works, With Example

Source: https://help.streetsmart.schwab.com/edge/1.48/Content/Placing%20Equity%20Trades.htm → Please expand Corporate Action Types.

Not that every corporate action need to be dealt with but it will be very beneficial if bonus/split/rights issue changes are dealt in one of the way indicated above.

Hope this helps.

[PravinJ]

Hi @ekveer understand your use-case and yes that this may be permitted in US, unfortunately not in India - User has to trade by him/her self at all times and we are merely an execution only platform.

We do have feedback from users to bring OCO (One Cancels Other) orders for Forever Orders, which we intend to launch for both Equity (Delivery) and MTF segment.

[ekveer]

Thanks @PravinJ for your response.

@ekveer

Lets assume bonus/split/rights happens in a share, then I think Dhan can perform one of the below action in the best interest of the investor.

• Adjust the quantity & price accordingly
• Cancel forever orders for that scrip and inform the user about cancellation of Forever order
• Inform the user about the corporate action and the Forever order he/she has in the system

I guess, you can at least do the third option among above options if you are not permitted to do the first 2 options.

Having said that, Forever orders are sitting on your platform and not with the exchange until triggered. Aren’t you permitted to make changes which are sitting on your platform?

[PravinJ]

Yes - we are building upcoming corporate actions, its being shipped to users as I write. Nope, we are permitted to make any changes to any orders - stock trading platforms can’t be trading on behalf of users, it becomes portfolio management and that is a whole different set of products & offerings.

[ekveer]

Hopefully, upcoming corporate actions feature can integrate with Forever orders and inform the user about the corporate action and pending Forever orders. Thanks.

[Divyesh]

Hi @ekveer

Thank you for sharing your suggestions with us. We’ve forwarded your feedback to our team.

[Zakir]

@Hardik

However, this was always prone to misuse, with instances of brokers debiting shares without a sell trade from the client or just breaking the clause in general.

As Dhan is well aware about “always prone to misuse” of DDPI, then why team introduced it?
Moreover, DDPI activation is mandatory for placing Forever Order on Equity sell side.

Zerodha and Fyers has GTT feature with selling side facility using T-PIN based e-DIS process. I think it is better give both option to Dhan user either use DDPI facility or T-PIN based e-DIS process to sale holdings.

I am new in Dhan community and have many ideas to discuss for better experience. Today ending here with the hope of your logical reply.

Thank you.

[PravinJ]

Hi @Zakir DDPI on Dhan is optional, for users who want a better experience can move to DDPI and rest can continue to use TPIN based eDIS process.

[Hardik]

Hello @Zakir

@Zakir

As Dhan is well aware about “always prone to misuse” of DDPI, then why team introduced it?

I guess there is some confusion here. The quoted “misuse” was in respect of PoA and not DDPI. Earlier, PoA (Power of Attorney) was subject to misuse given unclear use case of the same.

@Hardik

DDPI not only limits the debit of shares to instances of a sell trade initiated by the user, SEBI has also restricted the use of DDPI for limited purposes only, the entirety of which include (as of now):

• Transfer of Securities
• Pledging/re-pledging of Securities
• Mutual fund transactions through Demat Account
• Tendering shares in an open offer

[Zakir]

@Hardik @PravinJ Thank you for prompt reply and clarification.

I understand DDPI on Dhan is optional and I also opted it. For a better user experience and transparency, it is my suggestion allow traders / investors use Forever Sale Order either using DDPI facility or TPIN based eDIS process. But Dhan restricted Forever Sale Order only for DDPI user. I hope I am clear.

I wish Dhan becomes No. 1 choice for traders and investors community.

[PravinJ]

Thanks for the kind words @Zakir. If it was possible we would have figured out a way to do that, unfortunately a client has to be marked with all systems including depository as DDPI or TPIN based.

Also as @Hardik mentioned, the misuse was of PoA, largely for the known incident. EDIS / DDPI systems are built and introduced to prevent misuse.

[encore]

@PravinJ I wonder what you will reply on this information provided by NSE/SEBI. Every time I buy a stock, I get an email from NSE and this is the specific part of the email which mentions DDPI:

For Information & Education Purpose

We would like to draw your attention to "SEBI vide circular dated April 04, 2022, wherein they have introduced the mechanism of “Demat Debit and Pledge Instruction (DDPI)”. The DDPI shall serve the same purpose of POA and significantly mitigate the misuse of POA.

You should be aware that the stockbroker and depository participant cannot directly / indirectly compel the clients to execute the DDPI or deny services to the client if the client refuses to execute the DDPI.

Please refer to SEBI Circular dated October 06, 2022, for the list of instructions which client can give to its stockbroker / depository participant. You may refer the following link for same:

https://www.sebi.gov.in/legal/circulars/oct-2022/execution-of-demat-debit-and-pledge-instruction-ddpi-for-transfer-of-securities-towards-deliveries-settlement-obligations-and-pledging-re-pledging-of-securities-clarification_63724.html

Should you wish to give any instructions, these need to be signed in physical against each purpose of DDPI. In case of an eSign option is made available, client should be given an option to choose the specific purpose(s) of DDPI".

Now tell me the real reason, why don’t or can’t Dhan provide options to choose what to enable via DDPI?

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Part 2: When Zerodha can provide sell-side GTT orders through e-DIS (CDSL TPIN), why can’t Dhan provide forever sell-side orders for those who have not enabled DDPI?

[PravinJ]

Hi @encore DDPI is optional for users on Dhan, they can continue to use EDIS service and authenticate selling via EDIS TPIN each time. About the broker you are quoting, it’s about risk management of each broker, every platform will have their own underlying processes and systems.

[encore]

Thanks for the prompt answer.

Got it. It looks like it’s not a mandatory directive from the SEBI to provide options to users. But then, isn’t it more secure from a user’s perspective to have the choice of options? Is there a plan to provide such?