Pledge Request Form
Also written PRF · Pledge Request Form (PRF)
The standardised form on which a pledgor initiates a pledge, carrying mandatory undertakings from both pledgor and pledgee to comply with the Indian Contract Act and give reasonable notice before invocation.
In plain language
A pledge does not start with a handshake. It starts with a form — the Pledge Request Form (PRF) — which the pledgor submits through its DP to set the whole process in motion.
The PRF is not just a data-entry slip. Depositories are required to keep it in a standardised format, and it must carry specific legal undertakings from both sides, not just the mechanical details of the loan.
How it works
From Chapter 9, section 9.2.1 (and 9.2.2): the PRF must contain the securities to be pledged, the agreement number, the closure date indicating the pledge's duration, and the pledgee's details. Multiple pledges can run off a single agreement number, quoted on each instruction (entering the agreement number is optional in CDSL).
Under a SEBI circular dated 5 February 2026, the PRF must contain provisions requiring both pledgor and pledgee to give specific undertakings: the pledgee undertakes to give reasonable notice to the pledgor and comply with Sections 176 and 177 of the Indian Contract Act, 1872; both parties undertake to adhere to the Contract Act, the Depositories Act, applicable SEBI Regulations, circulars and Bye-Laws. Depositories must maintain a standardised format for the PRF.
The DP verifies the PRF for completeness and validity — checking that the pledged securities actually exist in the pledgor's account — and either returns it for correction or accepts it and issues an acknowledgement. PRFs, along with URFs and IRFs, must be preserved for at least five years.
A worked example
Mr Oberoi fills out a Pledge Request Form to pledge 6,000 shares against a Rs 20,00,000 loan. The form carries the securities to be pledged, an agreement number, a six-month closure date, and the lender's details as pledgee — along with the standard undertakings that both he and the lender must comply with the Indian Contract Act and the depository's Bye-Laws, and that the lender will give him reasonable notice before taking any step to invoke.
His DP checks that the 6,000 shares genuinely sit free in his account, finds the form complete, and accepts it, generating a pledge sequence number. His DP retains this PRF for at least five years, exactly as it would an Unpledge Request Form or an Invocation Request Form.
Why NISM asks about it
Chapter 9, sections 9.2.1–9.2.2, opens the pledge procedure with the PRF's content requirements before moving into the creation mechanics. Expect a question on the mandatory undertakings (Sections 176 and 177 of the Contract Act, reasonable notice) and on the five-year retention period shared with the URF and IRF.
Common exam traps
- The PRF must be in a standardised format across the depository — not a form each DP designs for itself.
- The pledgee's undertaking to give reasonable notice and comply with Sections 176–177 of the Contract Act is a mandatory PRF field, not an optional add-on.
- The agreement number is optional to quote in CDSL, though it remains a standard PRF field generally.
- PRFs, URFs and IRFs are all preserved for at least five years — not the eight years that applies to a DP's general records.
Check yourself
1.A pledgor submits a Pledge Request Form on 4 June leaving the execution date blank. The DP verifies the pledge on 6 June. What is the execution date?
- a)4 June, the date of submission
- b)5 June, the next business day after submission
- c)6 June, the business date on which the pledgor DP verifies the pledge
- d)The date on which the pledgee confirms the creation
Show the answer
Answer: (c) 6 June, the business date on which the pledgor DP verifies the pledge
If the execution date is not mentioned in the Pledge Request Form, then the business date on which the Pledgor DP verifies the pledge will be taken as execution date. That is 6 June.
Option A is the intuitive answer and the standard trap — the date of submission is simply not the reference point. Option B invents a business-day convention that does not exist here.
Option D confuses two different stages. Verification by the pledgor DP is what fixes the execution date; confirmation by the pledgee is a later, separate step that completes the pledge — the pledge will get credited only after the confirmation advice is entered in the DP system.
The underlying flexibility is worth remembering alongside it: the pledgor BO shall have the facility to set up a pledge request with a future date as the execution date, and may do so even in case of insufficient or nil balance in the pledgor BO account.
2.For how long must a DP maintain copies of Pledge Request Forms, Unpledge Request Forms and Invocation Request Forms?
- a)One year
- b)Three years
- c)A minimum period of 5 years
- d)Permanently, with no minimum prescribed
Show the answer
Answer: (c) A minimum period of 5 years
The DP shall maintain copies of all Pledge Request Forms (PRF), Unpledge Request Forms (URF) and Invocation Request Forms (IRF) for a minimum period of 5 years, or any such period informed by SEBI/NSDL/CDSL from time to time.
Note that it is a minimum — option D is wrong not because permanent retention would be improper, but because a period is prescribed.
This sits in the same checklist as three other DP duties worth memorising together: the instruction form must be submitted in duplicate, the pledgor DP and pledgee DP must each create at least two users to implement the maker-checker feature, and the request for confirmation of pledge must be given before the closure date mentioned in the instruction form — not applicable in the case of NSDL.
3.According to the DP's checklist for processing a pledge / hypothecation request, which of the following must the DP ensure?
- a)The instruction form is submitted in duplicate, and the pledgor DP and pledgee DP each create at least two users to implement the maker-checker feature
- b)The instruction form is submitted in triplicate, one copy going to SEBI
- c)A single user may enter and verify the request, provided the form is signed by all holders
- d)Pledge forms are kept for a minimum of 8 years
Show the answer
Answer: (a) The instruction form is submitted in duplicate, and the pledgor DP and pledgee DP each create at least two users to implement the maker-checker feature
Box 9.1 lists: "Ensure that the instruction form is submitted in duplicate" and "Pledgor DP and Pledgee DP each shall create at least two users to implement the Maker-checker feature. Ensure that all compulsory fields in the instruction form are entered."
- B is wrong: the form is in duplicate, and nothing goes to SEBI.
- C defeats the purpose of maker-checker. One user enters (maker) and another verifies (checker). The invocation procedure shows this too: the DP enters (maker) the invocation request details ... and verifies (checker) the details.
- D has the wrong period. The DP must maintain copies of all PRF, URF and IRF for a minimum period of 5 years or any such period that SEBI / NSDL / CDSL may inform.
The checklist also requires that, except in NSDL, the request for confirmation of pledge is given before the closure date mentioned in the instruction form.
Where this is taught
Free preparation for NISM Series VIRelated terms
- PledgeA charge created over demat securities in favour of a lender who may appropriate them unilaterally on default — created by book entry under section 12 of the Depositories Act, not by handing over anything.
- Invocation Request FormThe form a pledgee submits to its DP to invoke a pledge after the pledgor defaults, moving the securities from the pledgor's pledged balance to the pledgee's free balance without the pledgor's confirmation.
- Pledge sequence numberThe unique number the DP system generates for each pledge or hypothecation request, identifying that transaction for confirmation, closure and invocation even when many pledges exist between the same parties.
- PledgeeThe lender in a pledge or hypothecation — the party who confirms the pledgor's request through its own DP, and who is recorded as beneficial owner of the securities only on invocation.
- PledgorThe borrower in a pledge or hypothecation — the beneficial owner who offers demat securities as collateral, initiates the transaction through its own DP, and keeps ownership and corporate benefits until default.
- Unpledge Request FormThe prescribed form on which a pledgor asks its DP to close a pledge and release the securities, which the DP must retain for at least five years along with the PRF and IRF.
- Agreement numberThe optional identifier a pledgor quotes across multiple pledge instructions drawn under a single loan agreement, letting the DP link related pledges to one underlying contract with a lender.
- Pledge setup balanceThe transient balance a pledgor's securities are shown under, in the depository system, between the pledgor submitting a Pledge Request Form and the pledgee confirming it.