The Securities and Exchange Board(SEBI) of India vide its Notification dated 21st February 2020 has published the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2020. The amendment has expanded the scope of the term pledge to include re-pledge of securities for the margin or settlement obligations of the client.
The Amendment has included an additional explanation under Sub-regulation (12) of Regulation 79 which deals with the manner of creating pledge or hypothecation.
The explanation states that the ‘pledge’ would also refer to ‘re-pledge of securities for margin or settlement obligations of the client or such other purposes as specified by the Board from time to time”.
With the insertion of this explanation, depository participants of both the pledger and the pledgee will have to inform the other of the entry of creation of the re-pledge.
Click here to read the Notification.
