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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Extension of timeline for implementation of SEBI Circular 'Margin obligations to be given by way of pledge/Re-pledge in the Depository System' dated June 03, 2025

18-Aug-2025 | SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/118

SEBI has issued a circular extending the timeline for implementation of SEBI Circular 'Margin obligations to be given by way of pledge/Re-pledge in the Depository System', which was earlier to be implemented from 1st September 2025, will now be implemented from 10th October 2025. By virtue of the principal circular, the previous Annexure A of the SEBI circular on margin obligations from February 25, 2020, and Paragraph 41 of Master Circular for Stock Brokers dated August 9, 2024, have been amended. Key Highlights of the Amendment: 1. When a client sells securities that are pledged to a Trading Member (TM) or Clearing Member (CM), whether as margin or funded stock, the depositories will provide a single instruction option called "Pledge Release for Early Pay-in." This option will automatically release the pledge and block the shares for early pay-in in the client's Demat account based on their actual delivery obligation. No physical or electronic instructions, nor any DDPI/POA, will be necessary. 2. For mutual fund units invoked that are not traded on the exchange, the depositories will implement a single-step "Invocation cum Redemption" process. The invoked units will transfer to the TM/CM's margin pledge account and will be automatically redeemed from there. 3. Previously, when brokers invoked clients' pledged securities and transferred them to their Demat accounts, the shares remained unsold. This caused the securities to accumulate in the broker's Demat account, which counteracted the purpose of the invocation, which was to recover funds. For more information, please refer to the attached document.

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