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ND-PMS Clients Can Pledge Shares Without Violating PMS Regulations
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Securities and Exchange Board of Indiacorporate

ND-PMS Clients Can Pledge Shares Without Violating PMS Regulations

May 24, 2026

SEBI clarified that clients under Non-Discretionary Portfolio Management Services can pledge securities without breaching regulations, provided the decision remains client-driven. This is a significant update for investors using PMS.

Clarification on Share Pledging for ND-PMS Clients

SEBI has clarified on May 24, 2026, that clients engaging in Non-Discretionary Portfolio Management Services (PMS) may pledge their securities held in demat accounts for personal borrowing. The regulator emphasized that such pledging does not constitute borrowing by the portfolio manager, given that the decision is made solely by the clients.

This clarification is crucial for clients who wish to leverage their assets for personal financial needs without violating PMS regulations. It promotes flexibility in financing while ensuring that the PMS managers do not influence client decisions regarding asset utilization.

Investors and portfolio managers should review this clarification carefully as it presents new opportunities for client interactions and financial planning within the boundaries of regulatory compliance.

Citations

  • SEBI Notification (2026)
Practice Areas:corporate

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