Record pledge in 15 days of application: Sebi to depositories

Markets regulator Sebi has asked depositories to record pledge transactions entered between lenders and borrowers within 15 days of receiving an application.
Besides, depositories -- NSDL and CDSL -- are required to send this information to the lenders and borrowers within this timeline.
The move will help in providing a transparent mechanism for recording pledge transactions between lenders and borrowers.
"Within 15 days of receipt of the application, the depository shall after concurrence of the pledgee through its participant, create and record the pledge and send an intimation of the same to the participants of the pledger and the pledgee," Sebi said in a notification dated July 25.

Last month, Sebi had allowed depositories to offer a system for capturing and recording the non-disposal undertaking (NDU).
An NDU typically involves shares being transferred to a new demat account without change in the beneficial ownership with an undertaking that the transferee will not sell those shares.
At times, special purpose vehicles are floated for such share transfers to avoid making any disclosures.
Earlier, there was no framework to capture the details of NDU in the depository system as these happened outside and were not captured and reflected in the records of the depositories.