Why is the CDSL TPIN required while selling a stock?

Short Answer

CDSL TPIN are necessary for the regulating authority to know that you are selling your shares. It's a type of verification from the trader's POV to know that it has been authorized and there is no one else authorizing the trades.

Detailed Answer

CDSL is an independent regulating body that keeps a hold of all the stocks and shares purchased in the stock market. Though your Demat account holds the shares and stock bought, the CDSL PIN is required to sell these shares. Earlier, there wasn't anything that was quite streamlined through the respective account PIN to sell shares.

However, with increased security and offering a seamlessly trading experience without any hassles, a CDSL TPIN was included in the processes of selling shares. A CDSL TPIN can be authorized once on the trading day and can sell shares per your will and wish. However, this rule came into effect on June 1, 2020. But if you're someone that doesn't want to undergo this procedure of entering your CDSL TPIN every day, then you could fill out a POA application. It's an application stating that you are giving the broker power to sell the respective shares without the need for a CDSL TPIN.

For a POA to be passed, you would have to fill out an application and then physically sign it. There is no digital signature options in this, and then mail it to your broker. Moreover, if you're wondering how you can get your CDSL TPIN when you create your account with any broker, you will get it, and you could also get it from the "Authorization" option on your dashboard stockbroker to generate a new one.

Conclusion

CDSL TPIN are necessary to authorize the trades from your account if you were to sell the shares held in your Demat account. It's proof that you are knowingly selling them and are further clarified by the CDSL to execute the sale. However, if you feel that your transactions are higher in a day, then submitting a POA to your broker through an application seems feasible.

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