Depository Pledge on WebNotes

Margin pledge

Fri, 19 Jun 2026 00:00:00 +0000

Margin pledge is the process of pledging securities held in a demat account to a broker to receive collateral margin for trading, under the SEBI framework that since 2020 requires the pledge to be created directly with the depository (CDSL or NSDL ) through an OTP-authenticated request, replacing the earlier power-of-attorney transfer of shares to the broker. The securities stay in the investor’s own demat account with a pledge marker set, the investor keeps ownership, dividends, and bonus entitlements, and the broker re-pledges the same securities to the clearing corporation to generate margin against the investor’s futures and options positions.

SEBI margin pledge rules (September 2020 framework)

Mon, 18 May 2026 00:00:00 +0000

Margin pledge is the mechanism by which an investor uses securities held in their own demat account as collateral for trading margin, by creating a pledge in the broker’s favour at the depository (CDSL or NSDL ) instead of transferring the securities to the broker. The securities stay in the investor’s account with a pledge flag set, and the broker re-pledges them to the clearing corporation to generate collateral margin against the investor’s futures and options positions. It is a charge over the securities, not a loan or a sale; the investor keeps ownership, dividends, and bonus entitlements throughout.