SPICE
Also written Submission of Power of Attorney based Instructions for Clients Electronically
The SPEED-e facility letting a Clearing Member, holding a client's Power of Attorney, submit auto pay-in instructions on the client's behalf, with no paper delivery instruction from the client.
In plain language
A client can give a broker a Power of Attorney so the broker can move securities on the client's behalf without asking every time. SPICE is the SPEED-e feature built for exactly that. It stands for Submission of Power of Attorney based Instructions for Clients Electronically.
A Clearing Member holding a client's POA uses it to submit auto pay-in instructions straight to the DP where the client's demat account sits — debiting the client and crediting the CM's own Pool Account — with no paper delivery instruction from the client at all.
How it works
From Chapter 5, section 5.3.3: Clearing Members — clients who have given a Power of Attorney in favour of the Clearing Member — can submit auto pay-in instructions to DPs, where clients maintain their demat accounts, on SPEED-e, to debit clients' demat accounts and credit the CM's Pool Account. This eliminates the need to give paper-based delivery instructions to DPs for these specific pay-ins.
A worked example
Mr Deshpande has given his broker a Power of Attorney covering pay-in of securities he sells. When Mr Deshpande sells 200 shares, his broker — the Clearing Member — uses SPICE on SPEED-e to submit an auto pay-in instruction directly to Mr Deshpande's DP, debiting 200 shares from his demat account and crediting them to the broker's own Clearing Member Pool Account for settlement — all without Mr Deshpande signing a single paper Delivery Instruction Slip for this sale.
Why NISM asks about it
Chapter 5, section 5.3.3, sets out SPICE as the POA-based, paperless auto pay-in route available specifically to Clearing Members. Expect it tested against SIMPLE (an ordinary client's own mobile instruction) and against an ordinary manual instruction from a Password or Smart Card User.
Common exam traps
- SPICE is for Clearing Members acting under a client's POA — not for an ordinary client instructing her own account.
- It eliminates paper delivery instructions specifically for auto pay-in — not a general paperless facility for every kind of instruction.
- Do not confuse SPICE with SIMPLE — SIMPLE is the client's own mobile-phone instruction; SPICE is the CM's own POA-based instruction against the client's account.
Where this is taught
Free preparation for NISM Series VIRelated terms
- Delivery Instruction SlipThe signed form on which a beneficial owner instructs the DP to debit the demat account — no beneficiary account can be debited without one, whether the transfer is on-market or off-market.
- Clearing member accountThe special demat account a broker or custodian opens to settle exchange trades, through which clients' sold shares go to the clearing corporation and bought shares arrive; also called the pool account.
- SIMPLENSDL's facility letting a password-based SPEED-e user submit a Client-to-Clearing-Member Pool Account transfer instruction from a GPRS-enabled mobile phone.
- SPEED-eNSDL's internet-based facility, launched in September 2001, letting demat account holders and Clearing Members submit delivery instructions directly online instead of on paper.