Practice question
With reference to the Securities and Exchange Board of India's (SEBI) proposed relaxation regarding Power of Attorney (PoA) for investors, which of the following best explains the core conceptual distinction that allows a PoA holder to operate an account on behalf of an incapacitated investor?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The proposal establishes that physical disability automatically transfers the legal 'right to contract' to the PoA holder, who then acts as the absolute legal owner of the demat assets for all regulatory purposes.
- 2The proposal allows PoA operation only when the investor has been certified to have lost both physical and legal capacity, ensuring that the PoA holder has the authority to override existing nominations.
- 3The distinction is based on the principle of 'Mandatory Representation,' where the loss of physical mobility is legally equated to a total loss of cognitive capacity, requiring a PoA for all financial decisions.
- 4The framework distinguishes between an investor's physical inability to manually operate an account and their retained legal and cognitive capacity to enter into a valid financial contract.✓
Correct answer
The framework distinguishes between an investor's physical inability to manually operate an account and their retained legal and cognitive capacity to enter into a valid financial contract.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Government & Competitive Exams?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Related Practice Questions
Recommended practice questions in competitive exams