Summary: SEBI’s Nodal Co-ordination Cell, through Informal Guidance Issue No. I/18948/2026 dated August 17, 2026, considered Share India Securities Limited’s request under the Securities and Exchange Board of India (Informal Guidance) Scheme, 2025 concerning pledging of securities purchased under Discretionary Portfolio Management Services (D-PMS). Referring to Regulations 22(2)(m), 23(1) and 23(8) of the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020, SEBI stated that the client, being the beneficial owner of the securities, has the right to use their own assets, including securities under PMS, by way of pledge for personally availed loans. It clarified that Regulation 23(8)’s restriction on borrowing does not prevent D-PMS clients from initiating a pledge where it is solely at the client’s discretion and for their own benefit. SEBI further stated that beneficial ownership remains with the client unless the pledge is invoked, allowing the market value of pledged securities to continue being included in the Portfolio Manager’s AUM and regulatory reporting, unless the client withdraws from AUM for the pledge or otherwise. Responses to Queries 4 and 6 were not provided, while Query 5 was to be guided by the PMS Regulations and applicable Circulars/Master Circulars. A related TaxGuru publication on pledging of securities under PMS is also available.
Securities and Exchange Board of India
Circular No. HO/24/11/36(24)2026-IMD-RAC4/I/18849/2026| Dated: August 17, 2026
To,
Entities desirous of becoming Sponsor of a Mutual Fund/ All Asset Management Companies (AMCs)/ All Trustee Companies/Boards of Trustees of Mutual Funds/ Association of Mutual Funds in India(AMFI)
Madam/ Sir,
Sub: Revision of Application Form for Mutual Fund Registration
1. Please refer to the Master Circular for Mutual Fund s dated March 20, 2026 (“Master Circular”) which, inter alia, prescribes the requiremen ts relating to registration of Mutual Funds.
2. At present, applications for registration of a Mutual Fund are p rocessed in two stages, i.e. In-principle approval to the sponsor / applicant for setting up a Mutual Fund and Final registration of the Mutual Fund.
3. Currently, the application for in-principle approval is required to be submitted in Form A, as prescribed under the Master Circular. Further, the application for final registration of a Mutual Fund is required to be accompanied by Forms C and D.
4. In view of the recent overhaul of the SEBI (Mutual Fund s) Regulations, 2026 and SEBI Interm ediaries Regulations, it has been decided to revise and consolidate the existing forms into a single application form for registration of Mutual Funds. The revised format of Form is enclosed as Annexure A.
5. All other conditions specified in the Master Circular, shall remain unchanged.
6. This Circular is issued in exercise of the powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with SEBI (Mutual Fund Regulations, 2026, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.
7. This Circular is available at www.sebi.gov.in under the link “Legal → Circulars”.
Yours sincerely,
Jubin Mehta
Deputy General Manager
Investment Management Department
