Jul. 31, 2026 IND BSE Operational Guidelines Issued
On Jul. 31, 2026, IND BSE issued a notice regarding operational guidelines for the implementation of the IND SEBI Jul. 3, 2026 circular above.
The guidelines were developed in consultation with IND SEBI, depositories, and the Brokers' Industry Standards Forum (ISF), covering the Client Unpaid Securities Pledgee Account (CUSPA) pledge mechanism as described above.
Trading members (TMs) must communicate CUSPA pledge details to clients via email, SMS, or electronic messaging on or before the start of the next trading day.
Communication must include the ledger debit amount and margin obligation, details of pledged securities, and the TM's right to invoke the pledge.
TMs must maintain a policy on handling unpaid securities, approved by competent authority, hosted on their website, and communicated to all existing clients before Oct. 31, 2026.
New clients must be informed before the CUSPA mechanism is applied to them.
The maximum permissible CUSPA pledge value is 2.25 times the difference between the client's end-of-day margin obligation and aggregate clear ledger balance; excess pledge must be released on or before the next trading day.
CUSPA-pledged securities may not be pledged, re-pledged, or transferred to any bank, non-banking financial company (NBFC), or clearing corporation.
The value of CUSPA-pledged securities may be counted toward margin reporting, but TMs may not provide clients with exposure on the basis of CUSPA-pledged securities.
Where a client fails to meet payment obligations, the TM must provide reasonable notice before invoking the pledge.
Liquidation trades must be identified in the contract note using the client's unique client code (UCC).
Extensions in exceptional circumstances are limited to six permitted reasons, including lower circuit, trading suspension, graded surveillance measure, sale restrictions due to regulatory instructions, other authority orders, or insider trading restrictions.
Operational guidelines 1–9 take effect on Oct. 31, 2026; operational guideline 10 on pledge extensions takes effect on Jan. 3, 2027.
On Apr. 24, IND SEBI consulted on handling of clients’ unpaid securities.
IND SEBI published a consultation paper on a draft circular on handling unpaid client securities by trading members/clearing members, proposing revisions to align the framework with operational and market developments while protecting investors.
Follows IND SEBI Jun. 2025 issued master circular for stockbrokers, see #213116.
Outline of Proposed Circular
The proposal replaces paragraph 46 of the Jun. 17, 2025 Master Circular, considering operational issues and market changes such as direct payout of securities to clients’ dematerialization (demat) accounts.
Brokers may allow up to five trading days for clients to pay for securities but can mandate a shorter period as per their disclosed policy.
Unpaid securities will stay in clients’ demat accounts but must be pledged to a dedicated Client Unpaid Securities Pledgee Account.
They must then be re-pledged to the clearing member’s separate account where the trading member and clearing member are separate entities and the trading member has not met its fund obligation.
Timelines are proposed for same-day or next-day release of pledges once client payments are received.
Trading members must assess pledged securities daily and release any excess pledge on the same day.
Depositories will automatically release pledges if they are neither invoked nor released within five trading days after payout, at the end of the next trading day.
Extensions of pledge are allowed only in exceptional situations such as trading suspensions or force majeure events, for up to one additional calendar week, with further extensions if conditions persist.
Consultation Period
Comments are due by May 15, 2026.
Jul. 3, 2026 Circular Finalized
On Jul. 3, 2026, IND SEBI finalized the circular on handling unpaid client securities by trading members/clearing members, revising Master Circular for Stock Brokers.
Stock exchanges shall issue operational guidelines for the implementation of this circular's provisions within 30 days in consultation with depositories.
The amended provisions of para 46.1 to 46.11 of Master Circular shall come into force with effect from three months from the issuance date of operational guidelines.
The amended provisions of para. 46.12 to 46.14 shall come into force with effect from six months from the issuance date of this circular, i.e., Jan. 3, 2027.
Jul. 31, 2026 IND BSE Operational Guidelines Issued
On Jul. 31, 2026, IND BSE issued a notice regarding operational guidelines for the implementation of the IND SEBI Jul. 3, 2026 circular above.
The guidelines were developed in consultation with IND SEBI, depositories, and the Brokers' Industry Standards Forum (ISF), covering the Client Unpaid Securities Pledgee Account (CUSPA) pledge mechanism as described above.
Trading members (TMs) must communicate CUSPA pledge details to clients via email, SMS, or electronic messaging on or before the start of the next trading day.
Communication must include the ledger debit amount and margin obligation, details of pledged securities, and the TM's right to invoke the pledge.
TMs must maintain a policy on handling unpaid securities, approved by competent authority, hosted on their website, and communicated to all existing clients before Oct. 31, 2026.
New clients must be informed before the CUSPA mechanism is applied to them.
The maximum permissible CUSPA pledge value is 2.25 times the difference between the client's end-of-day margin obligation and aggregate clear ledger balance; excess pledge must be released on or before the next trading day.
CUSPA-pledged securities may not be pledged, re-pledged, or transferred to any bank, non-banking financial company (NBFC), or clearing corporation.
The value of CUSPA-pledged securities may be counted toward margin reporting, but TMs may not provide clients with exposure on the basis of CUSPA-pledged securities.
Where a client fails to meet payment obligations, the TM must provide reasonable notice before invoking the pledge.
Liquidation trades must be identified in the contract note using the client's unique client code (UCC).
Extensions in exceptional circumstances are limited to six permitted reasons, including lower circuit, trading suspension, graded surveillance measure, sale restrictions due to regulatory instructions, other authority orders, or insider trading restrictions.
Operational guidelines 1–9 take effect on Oct. 31, 2026; operational guideline 10 on pledge extensions takes effect on Jan. 3, 2027.
Regulators
IND BSE; IND SEBI
Entity Types
B/D; Depo; Exch
Reference
Nt 20260731-12, Gd,7/31/2026; Cir HO/38/11/(9)2026-MIRSD-POD/I/15382/2026, 7/3/2026; CP 4/24/2026; ESG;
