SEBI Extends Deadline For Implementation Of Margin Obligations Process By Way Of Pledge

Markets regulator Securities And Exchange Board of India on Monday extended the deadline for the implementation of framework pertaining to the process of margin obligations via pledge and re-pledge within the depository system to Oct. 10.

This was scheduled to come into effect from Sept. 1, 2025.

The extension came after SEBI received representation from depositories -- Central Depository Services (India) Ltd. and National Securities Depository Ltd. -- requesting for an extension of time to carry out system developments and to ensure system readiness by carrying end-to-end testing.

"Based on the same and in order to ensure smooth implementation without any disruption to the market players and investors, it has been decided to extend the timeline for implementation to Oct. 10, 2025," Sebi said in its circular.

Under the framework, SEBI introduced a mechanism where clients' securities, upon invocation, will be blocked for early pay-in within the client's demat account. The move will reduce chances of brokers misusing securities while ensuring a clear transaction trail.

Also, SEBI introduced a single instruction in the form of "pledge release for pay-in" where the pledge will be released and the pay-in block will be set-up immediately in the client's demat account.

Further, depositories will provide the necessary functionality for the "pledge release for pay-in" system to ensure compliance with the new norms.

Once implemented, brokers will no longer need physical or electronic instructions to process un-pledging and delivery, as the system will automatically validate the pay-in to the extent of the client's obligation.