HO/47/14/12(1)2026-MRD-POD2/I/4229/2026 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR HO/47/14/12(1)2026-MRD-POD2/I/4229/2026 February 5, 2026 To All Depositories Madam/Sir , Subject: Creation/Invocation of pledge of securities through depository system The framework for pledging of shares through the depository system is prescribed in paragraph 4.13 of the SEBI Master Circular for Depositories dated December 03 , 2024 ('Master Circular') read with Regulation 79 of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 ( ' DP Regulations ' ) . In terms of the said framework, the Depositories are , inter alia , required to make provisions in their respective bye-laws to provide for the manner of creating and invoking a pledge in accordance with Section 12 of the Depositories Act, 1996 and the DP Regulations . Further, Sections 176 and 177 of the Indian Contract Act, 1872 lay down the rights of the pawnor and pawnee , respectively , and , inter alia , require the pawnee to give a reasonable notice of sale to the pawnor prior to selling the pledged assets . In this regard, in order to ensure compliance with the provisions of Sections 176 and 177 of the Indian Contract Act, 1872 in the framework for pledge of securities through Depositories, the following paragraphs shall be inserted after paragraph 4.13.2 in the Master Circular: "4.13.3 . The Pledge Request Forms of the depositories shall , inter alia , make provision for the pledger and pledgee to undertake the following: 4.13.3.1 The pledgee undertakes to provide reasonable notice to the pledger and comply with the requirements of Sections 176 and 177 of the Indian Contract Act, 1872. 4.13.3.2 The pledger and pledgee undertake to abide with the provisions of the Indian Contract Act, 1872, the Depositories Act, SEBI Regulations, circulars, and bye-laws in forc