SEBI has provided informal guidance permitting discretionary Portfolio Management Services clients to pledge securities at their discretion, maintaining their status in Assets Under Management until invocation.
SEBI Allows D-PMS Clients to Pledge Securities
The Securities and Exchange Board of India (SEBI) has issued informal guidance permitting clients of discretionary Portfolio Management Services (D-PMS) to pledge their securities according to their discretion. This allows the clients significant flexibility in managing their investments.
Under this guidance, pledged securities will continue to be counted within the client's Assets Under Management (AUM) until such time as the pledge is invoked. This regulatory clarity aims to enhance client security and confidence in discretionary portfolio investments.
Practitioners should note this development as it can significantly impact the advisory services rendered to clients involved in discretionary portfolio management, offering them broader financial strategies for leveraging their securities.
Citations
- SEBI Guidance (2026) SEBI Journal 3
