The Securities and Exchange Board of India (SEBI) on April 24, 2026, issued Draft Circular for Public Comments Ease of Doing Investment and Ease of Doing Business- Handling of Client’s Unpaid Securities by Trading Members/ Clearing Members.
SEBI has issued a draft circular proposing revisions to the Client Unpaid Securities Pledgee Account (CUSPA) framework to enhance investor protection, improve clarity, and align with evolving market practices. The existing provisions—originally introduced through earlier SEBI circulars and consolidated in the Master Circular for Stock Brokers (June 17, 2025)—require trading and clearing members to hold unpaid client securities in a separate demat account until payment obligations are met.
The proposed changes aim to address operational challenges raised by industry stakeholders and introduce greater flexibility. Key proposals include clarifying that brokers may allow a shorter funding period than five trading days, specifying timelines for same-day or next-day release of pledge upon payment, and enabling partial release of pledged securities based on client payments and valuation changes.
Further, SEBI has proposed defining timelines for auto-release of pledge (end of sixth trading day), clarifying procedures for re-pledging between trading and clearing members, and allowing extension of pledge in exceptional cases such as market disruptions or unsellable securities. These measures seek to balance ease of doing business with strong investor safeguards.
The draft has been released for public consultation, with stakeholders invited to submit comments by May 15, 2026.
