Regulatory Alerts2026-02-05
SEBI Circular on Creation and Invocation of Pledge of Securities Through Depository System
The Securities and Exchange Board of India (SEBI) has issued a circular mandating depositories to amend their bye-laws and systems to ensure compliance with the Indian Contract Act, 1872 regarding the pledge of securities. The directive requires the inclusion of specific undertakings in Pledge Request Forms where pledgees commit to providing reasonable notice to pledgers before selling pledged assets. Depositories must implement these changes, including maintaining standardized forms and sending invocation notifications, by April 6, 2026.
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