Can a Broker misuse the Power of Attorney?

Technically a broker can misuse the Power of Attorney (POA) by selling your demat holding without you placing a sell order.

But the brokers are highly regulated entities. Any such misconduct could result in to very high penalties or even loosing the membership of exchange and depository (CDSL/NSDL).

Carefully note that In case of short of margin in your trading account, the broker has rights to sell shares from your PoA enabled demat account without informing you in advance. This is part of the PoA agreement.

Get more detail about Demat PoA:

• Power of Attorney for Demat Account - Explained with Examples and FAQs
• How do I safeguard my Demat Account with Power of Attorney to Broker?
• Are there different types of Power of Attorney?
• What is the validity of my Power of Attorney for demat account?
• Are there any charges associated with Demat Power of Attorney?
• Does broker allows time bound Power of Attorney for Demat Account?
• Should Power of Attorney be printed on the Stamp Paper?
• Can I sign Power of Attorney online?
• Can a Broker misuse the Power of Attorney?
• Can a Broker withdraw money from my linked bank account using the Power of Attorney I gave?
• Can I use Broker Pool Demat Account to keep my share and do not give Power of Attorney?
• Can I trade in Futures and Options without Power of Attorney to my Demat account?
• My signed Power of Attorney is still in courier. Can I still trade?