Understanding CUSPA (Client Unpaid Securities Pledge Account)

As per SEBI guidelines, if payment for a securities purchase is pending, the securities are temporarily pledged in the broker’s favour under the Client Unpaid Securities Pledge Account (CUSPA).

What does this mean for you?

• Your securities continue to remain in your demat account
• They are temporarily pledged until the payment is made
• No further action is required from you after you make the payment

What happens once payment is completed?

After the payment is made, the pledge on the securities is released. No further action is required from your end.

What if payment is delayed?

If the payment is not made, the broker may sell the pledged securities only to the extent of the outstanding amount, in line with regulatory guidelines. We therefore request you to clear the dues as per the amount and timeline shared in the communication.

Frequently Asked Questions (FAQs)

1. Will all my securities be pledged under CUSPA?
No. Only securities needed to cover the pending dues are pledged. This may be up to around 125% of the pending amount to account for market price changes. This does not mean all your securities will be pledged.

2. Will all my securities be sold if I don’t pay?
No. Only the securities pledged under CUSPA, and only to the extent required to recover the outstanding amount, may be sold.

3. What happens after I make the payment?
After the payment is made, the pledge on the securities is released. No further action is required from your side.

4. Can I sell these securities while they are under CUSPA?
Yes. The securities remain in your demat account, and you may sell them to clear the outstanding dues.

5. Under what conditions can securities be pledged under CUSPA?
Securities may be pledged under CUSPA in case of any outstanding dues arising from trades, positions, brokerage, statutory charges, or other applicable charges.