As per SEBI guidelines, investors are required to obtain confirmation before selling their shares or stocks. To enhance investor protection, CDSL has implemented e-DIS verification, which stands for Electronic Delivery Instruction Slip. This verification process is facilitated through TPIN when equities are sold. TPIN, a unique numerical code, acts as a security measure to safeguard accounts from unauthorized access and fraudulent activities. It is imperative to maintain the confidentiality of your TPIN and avoid sharing it with anyone to prevent unauthorised access to your account. This article delves into the intricacies of TPIN, TPIN full form, functionality, and the process of generating it.
What is TPIN?
TPIN, an acronym for Transaction Personal Identification Number, serves as an additional layer of security for investors accessing their Demat (Dematerialised) accounts over the phone. Essentially, it is a numeric password designed to authenticate users and authorise transactions over the phone.
Why do traders need a CDSL TPIN?
A Demat account, along with a trading account, is essential for trading in the Indian financial markets. You can open a Demat account with Bajaj Broking.
Opening a Demat account with CDSL will enable you to hold securities. In India, you can trade on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). A brokerage firm is needed as investors cannot directly interact with the market. This broker makes the trades on a client’s behalf, buying and selling shares as per instructions. The Demat account is a prerequisite to this, as your purchased shares are received by your stockbroker and stored in the account virtually.
Previously, this trading process was facilitated by a power of attorney (POA), a document that gave rights and the authority to trade to your stockbroker. A major disadvantage of this system was that, as per regulations, the POA had to be physically signed and sent to your broker for verification. This was incompatible with the Demat account opening, which required an e-sign with the Aadhaar card, among other documents.
Owing to the lengthy process, the POA was replaced with TPIN. The TPIN system has not only enhanced investor control over trading but has also increased the security and reliability of transactions.
With the new system, investors can freely transact using the CDSL TPIN without any worries. All brokers integrate CDSL into their software as a third party. When you want to trade, you will be redirected to the CDSL portal, where you can input the TPIN to authorise the transaction.
Your TPIN will be needed in the below-mentioned situations, among others:
- Managing the delivery trading sell orders
- Accepting margin benefits
- Managing sell orders to receive intraday shares in your account
Among its numerous uses, TPIN is primarily a security measure and helps you sell securities from your broker’s app or website.
How to generate TPIN?
Generating a TPIN involves a straightforward process facilitated by the Depository Participant (DP) with whom the investor holds the Demat account. Typically, the steps include:
- Requesting TPIN generation: Investors need to request their DP for TPIN generation.
- Verification of identity: The DP verifies the investor's identity through predetermined authentication procedures.
- Allocation of TPIN: Upon successful verification, the DP allocates a unique TPIN to the investor, ensuring confidentiality and security.
- Activation: Once allocated, the investor needs to activate the TPIN, usually through the DP's online portal or via a designated helpline number.
- Confirmation: After activation, the investor receives confirmation, enabling them to utilise the TPIN for telephone-based transactions.
How does TPIN work?
As mentioned above, your unique TPIN acts as an additional security layer that ensures your transactions are authorised. Let us take a look at how it works:
- Initiating a transaction: The first step to trading, buying, or selling is to access the trading platform and initiate a transaction.
- Verification through TPIN: Your trading platform will then prompt you to enter your unique TPIN before the transaction can be completed. This step verifies your identity to make sure that it is an authorised transaction.
- Transaction process: The transaction will be completed when your TPIN is verified. If you enter the wrong TPIN, the transaction will not be processed, thus preventing unauthorised activity on your account.
- TPIN changes: It is recommended that you revise your TPIN frequently. This improves the security of your account and enhances protection against unauthorised access and activity.
Importance of TPIN
The significance of TPIN in the Indian securities market cannot be overstated. Here is why:
- Enhanced security: TPIN adds an additional layer of security, mitigating the risk of unauthorised access to Demat accounts. This is crucial in an era where cyber threats loom large, safeguarding investors against potential fraud and unauthorised transactions.
- Convenience: While stringent in terms of security, TPIN also enhances convenience by facilitating telephone-based transactions. Investors can execute trades and manage their investments remotely, without the need for a physical presence or extensive paperwork.
- Streamlined authentication: TPIN streamlines the authentication process for telephonic transactions, reducing the reliance on traditional methods like signatures or physical documents. This expedites the transaction process, enhancing overall efficiency in the market.
- Compliance requirements: Regulatory bodies like SEBI (Securities and Exchange Board of India) mandate the use of TPIN as part of compliance measures to ensure the security and integrity of the securities market. Adherence to TPIN protocols is, therefore, imperative for investors and market intermediaries alike.
- Peace of mind: For investors, TPIN offers peace of mind, knowing that their transactions are protected by an additional layer of security. This instils confidence and encourages greater participation in the market, driving liquidity and market vibrancy.
How to use TPIN for selling shares?
With the meaning and workings of TPIN clarified, let us look at how you can sell stocks by using the TPIN. Take a look at the following process:
- Log into the trading account from your broker’s platform, which is connected to your Demat account.
- You can easily initiate a sell order if you want to sell any stocks. Once submitted, the request will be marked as pending in your account.
- Post this, you will get a TPIN request for authorisation through email or SMS from CDSL.
- Now, click on the link and input your Demat account number.
- To authorise the transaction, enter the 6-digit TPIN generated earlier and the OTP from your mobile number.
- Once the authorisation is complete, your sell order will be seamlessly executed.
- After the transaction is complete, your Demat account will be debited, and the resulting funds will be displayed in the linked bank account. This will happen according to your trading account’s settlement cycle. For complete transparency, you can easily view the account activity through your broker’s platform.
Benefits of having A CDSL TPIN
While the primary benefit of a CDSL TPIN lies in its role as an additional security blanket, it has some additional benefits, which are mentioned below:
- Transaction convenience: Your unique TPIN can be used to authorise transactions seamlessly and swiftly. It largely eliminates the reliance on time-consuming activities like physical signatures and additional paperwork, streamlining the trading process.
- Control your investments: Your TPIN empowers you to directly control your investments. Equipped with a TPIN, you can execute trades when you want, enabling you to craft flexible and agile strategies.
- Improved transparency: With a TPIN, your transactions are digitally recorded and are also traceable. This improves transparency across the entire financial system and enables investors to keep track of their trades.
- User-friendly: TPIN use is aimed at enhancing the ease of transacting and trading for investors in the financial market. This is also an important step in improving the arena for beginners and young investors, as they can remain assured that their accounts are secure.
How to change TPIN?
With the critical role TPIN plays in your trading activity, it is important to learn how to change it. Whether you want to change the TPIN of your account for security purposes or you have forgotten it, it is fairly simple to change the TPIN. Here are seven simple steps you can follow to secure your account and change your TPIN:
- The first step is to visit the platform of your broker or depository participant. This can be a web portal or a mobile application. You can either log in to this portal or the CDSL portal.
- After logging in, access the section to reset or generate TPIN. This is usually located in the security settings or the account settings.
- The next step is to verify your identity. This can be done easily by entering details like your email address, mobile number, or demat account number.
- You will receive an OTP on your registered email address or mobile number to verify the details.
- Enter the OTP you have received to verify the details and proceed.
- Next, you will be asked to choose a new TPIN. It is recommended that you select a TPIN that you can remember but also one that is not easy to guess.
- Lastly, when you have confirmed the new TPIN, a confirmation mail or message will be sent to your registered email address and phone number. This is the final confirmation that your TPIN has been changed successfully.
Conclusion
In conclusion, TPIN serves as a critical component in ensuring the security, efficiency, and integrity of the Indian securities market. By providing enhanced security measures, streamlining authentication processes, and offering convenience to investors, TPIN plays a pivotal role in fostering trust and confidence in the financial ecosystem. As technology continues to evolve and threats evolve along with it, the importance of robust authentication mechanisms like TPIN cannot be overstated. Therefore, investors must familiarise themselves with TPIN protocols and adhere to them diligently to safeguard their investments and contribute to a resilient and thriving securities market.
