SEBI has clarified that clients of Discretionary Portfolio Management Services can pledge their securities under certain conditions, affecting compliance in asset management.
Guidance on Pledging D-PMS Securities
SEBI has outlined provisions allowing clients of Discretionary Portfolio Management Services (D-PMS) to pledge their securities without breaching Regulation 23(8) of the SEBI regulations. This guidance confirms that such pledging can continue, with the assets remaining categorized within the Assets Under Management (AUM) until the pledge is invoked.
This clarification is significant as it introduces operational flexibility for investors while reinforcing compliance with regulatory standards, ensuring investor protection remains a priority.
Legal practitioners should factor in these provisions when advising clients on asset management, particularly regarding investment strategies involving pledged securities and related regulatory implications.
Citations
- SEBI Clarification (2026)
