Sebi on Thursday directed depositories to strengthen norms for the creation and invocation of pledges of securities by introducing clearer undertakings, a standardised pledge request form, and mandatory notifications when a pledge is invoked, in line with the Indian Contract Act.
Under this, pledge request forms must include undertakings from both the pledger and pledgee, including a commitment by the pledgee to provide reasonable notice before selling pledged securities, the markets regulator said in a circular.
Sebi has also mandated a standardised pledge request form across depositories and required them to send notifications to both parties when a pledge is invoked, confirming that the pledgee has been recorded as the beneficial owner.
The new norms will be implemented on or before April 6, 2026.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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