Sebi Defers Deadline For Implementation Of New Margin Pledge Framework To Oct 10

The Securities and Exchange Board of India (Sebi) has extended the deadline for the implementation of its margin pledge and re-pledge rules in the depository system to give market players more time to prepare. The new framework, which was earlier set to take effect from September 1, 2025, will now be implemented from October 10, 2025.

In a circular issued on August 18, 2025, Sebi said the decision was taken after receiving feedback from the two main depositories, the Central Depository Services (CDSL) and the National Securities Depository (NSDL). The regulator said, “Sebi has received representation from depositories (CDSL and NSDL) requesting for an extension of time to carry out system developments and to ensure system readiness by carrying end-to-end testing.”

Sebi said the extension was aimed at avoiding market disruptions and ensuring a smooth transition. The circular added, “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 October 10, 2025.”

Sebi also directed all market infrastructure institutions (MIIs) to take necessary steps for compliance. It said, “Stock exchanges, depositories and clearing corporations are directed to bring the provisions of this circular to the notice of their members and/or participants and also disseminate the same on their websites; put in place appropriate systems and procedures to ensure compliance of the provisions of this circular; [and] make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.”

Sebi had introduced the pledge and re-pledge mechanism for margin obligations through a circular dated June 3, 2025. The measure aims to streamline the margin process by ensuring that all pledges of securities are recorded directly in the depository system.

According to Sebi, the framework is meant to improve transparency and safeguard investor interests. Under the framework, securities pledged for margin will stay in the investor’s account, but be marked as pledged, which reduces the chances of misuse of client securities by intermediaries.

With the extension, Sebi has also provided depositories and clearing corporations more time to upgrade their systems and complete end-to-end testing before the framework comes into force.