The Central Depository Services (India) Limited (CDSL) on March 13, 2026 issued a communiqué to depository participants regarding compliance requirements for the creation and invocation of pledge of securities through the depository system. The circular follows the framework introduced by the Securities and Exchange Board of India through its recent directive governing pledge transactions.
CDSL informed that from April 6, 2026, depository participants must obtain a signed undertaking from both the pledgor and pledgee at the time of submitting a pledge request. The undertaking requires the pledgee to provide reasonable notice to the pledgor and comply with provisions under the Indian Contract Act, 1872, while both parties must also adhere to applicable provisions under the Depositories Act, 1996, SEBI regulations, circulars, and depository bye-laws.
Additionally, CDSL clarified that upon invocation of pledged securities, the depository will send an intimation to both the pledgor and pledgee confirming the invocation, and the pledgee will be recorded as the beneficial owner in accordance with the applicable regulatory provisions.
[Notification No. CDSL/OPS/DP/SETT/2026/180]
