Pledge (Collateral) – Placement and Release of Shares

Problem Description

When shares are pledged as collateral they remain restricted in an investor’s account. As a result, the pledged shares cannot be released or utilized until the underlying obligations are resolved.

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For Placement Requests (BANKS ONLY): For placement requests issues may arise due to because incorrect account details quoted, the required volume of shares is not available in the investor’s account, or the documentation submitted is incomplete or invalid.

For Release Request: In some cases issues may arise if the pledge is an old or a legacy pledge, pledge linked to a dead house or transfered to another house as instructed by the bank or a default by the borrower on their repayment obligations.

Step-by-Step Resolution

Pledge Placement Process

1. The bank submits a formal email request to CSCS with all required documentation.

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Required Documentation For Pledge Placement

- Joint Memorandum for Lien (JML)

- Broker’s Consent Letter

- Board Resolution (for corporate accounts)

- Updated Sales Mandate

- Lien Placement Letter (must originate from the bank)

- CHN and Account Number

- Confirmation of availability of the required volume of shares

2. Our team conducts due diligence on the documents

3. Our team processes the placement and reverts to the bank with confirmation or feedback.

Dead House / Old Pledge – Release Process

1. The bank sends an email request to CSCS for pledge release attaching the below required documentation or Pledge Release

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- Valid Mandate Card

- Bank Instruction Letter authorising release of the pledge

- Signatures must align with mandate records

- CSCS Account Number and CHN

2. Our team investigates the pledge status and validates the request.

3. Where the pledge is linked to a dead house, we will advise the bank to notify the investor to provide a new account under an active house.

4. Upon successful pledge release, CSCS issues a confirmation letter to the bank.

Expected Resolution Timeline

Within 48 business hours of receiving a complete complaint and all required documentation.

Additional Tips / Notes

1. Request the Pledge placement on shares or release of pledged shares can only be done after obligation completion or end of borrowing arrangement, pledge valuation (PVAL), or trade completion.

2. Incomplete documentation will delay processing.

3. Pledges linked to dead houses cannot be resolved without a new active account.

4. CSCS acts strictly based on bank instructions for both placement and release.