Motilal Oswal Subsidiary Receives SEBI License to Offer Custodian Services

Motilal Oswal Financial Services' fully owned subsidiary, Motilal Oswal Custodial Services Private Limited (MOCSPL), has secured regulatory approval from the Securities and Exchange Board of India (SEBI) to function as a custodian of securities. This authorization, granted under the SEBI (Custodian) Regulations, 1996, permits MOCSPL to provide custody services to a diverse range of institutional clients.

The custodial license enables MOCSPL to safeguard securities, manage trade settlements, process corporate actions, and handle regulatory reporting requirements. The client base expected to benefit from these services includes alternative investment funds (AIFs), portfolio management service (PMS) providers, mutual funds, insurance firms, and pension funds. By entering this segment, Motilal Oswal aims to strengthen its institutional services portfolio.

Custodian operations in India are governed by strict regulatory standards, requiring a substantial net worth, independent infrastructure, and audited operational controls to ensure integrity and security of client assets. With this approval, MOCSPL is authorized to hold and manage institutional assets within the Indian financial market, positioning itself as a key player in this specialized domain.

This development expands Motilal Oswal's suite of institutional offerings, which already includes institutional equities, wealth management, asset management, private wealth, investment banking, alternative investments, and home finance. The addition of custody services means clients can now access a broader range of execution, safekeeping, and post-trade services through a consolidated institutional relationship with the group.

Speaking on the occasion, Motilal Oswal, Group CEO and Co-founder of Motilal Oswal Financial Services, highlighted the rapid growth in India's institutional asset base. He noted that alternative investment funds, portfolio managers, and foreign investors have been increasingly active in Indian markets. He emphasized that custody services are a critical component supporting this growing ecosystem and expressed confidence that Motilal Oswal’s entry will contribute to the development of domestic market infrastructure that aligns with global benchmarks.

The company has indicated that it will prioritize enhancing service quality with a focus on accuracy, responsiveness, and transparency. Technology will play a central role in meeting the evolving demands of institutional clients, particularly alternative funds, offshore investors, and domestic institutions. Teams at MOCSPL are preparing to deliver tailored solutions aligned with these client segments.

MOCSPL plans to initiate its custodial operations in the final quarter of 2026, contingent upon completion of all operational readiness requirements. This timeline allows the company to establish necessary systems, processes, and compliance frameworks to support a smooth launch.

The entry of Motilal Oswal into the custodial services space reflects broader trends in the Indian financial sector, where increasing institutional participation and asset diversification have created demand for comprehensive post-trade and safekeeping solutions. Custodians play a vital role in protecting investor assets, facilitating settlements, and ensuring regulatory compliance, which collectively support the stability and efficiency of capital markets.

As the Indian securities market continues to mature, players like MOCSPL will contribute to strengthening its infrastructure, providing institutional clients with integrated services that combine execution, custody, and reporting. The move also aligns with SEBI’s efforts to foster a robust custodial ecosystem within the country, reducing dependency on foreign custodians and enhancing domestic capabilities.

Motilal Oswal’s expansion into custody services complements its existing foothold in financial services and underscores the group’s commitment to addressing the comprehensive needs of institutional investors. With an established track record in equities and wealth management, the group is well-positioned to leverage its brand, expertise, and technology to build a strong custodial business.

Investors and institutional clients can look forward to a consolidated service experience that integrates multiple facets of asset management and custody under one roof by late 2026. This integration is expected to improve operational efficiencies and transparency for clients increasingly focused on compliance and risk management.