Enhanced Surveillance Measure (ESM) - Securities Movement Across Stages Effective October 8, 2025

Description

BSE circular detailing securities entering ESM framework, moving to higher/lower ESM stages, and consolidated list of 27+ securities under enhanced surveillance with their respective stages.

Summary

BSE has issued an Enhanced Surveillance Measure (ESM) circular effective October 8, 2025, identifying securities entering the ESM framework, those moving to higher ESM stages, and providing a consolidated list of securities under surveillance. Four new securities are being added to ESM Stage I, three existing securities are being moved to higher ESM stages, and no securities are moving to lower stages or exiting the framework.

Key Points

• 4 new securities shortlisted for ESM Stage I: AAA Technologies Ltd, Chandrima Mercantiles Ltd, GSB Finance Ltd, and Sigma Solve Ltd
• 3 securities moving to higher ESM stages: Hi-Klass Trading and Investment Ltd, Omansh Enterprises Ltd, and Valiant Communications Ltd
• No securities moving to lower ESM stages
• No securities moving out of ESM framework
• Consolidated list includes 27+ securities across ESM Stage I and Stage II
• Multiple SME scrips included in the surveillance framework
• Changes effective from October 8, 2025

Regulatory Changes

The ESM framework is a surveillance mechanism used by BSE to monitor securities that exhibit abnormal price movements or other unusual trading patterns. Securities are placed in different stages (Stage I, II, etc.) with progressively stricter surveillance measures including:

• Enhanced margin requirements
• Trade-for-trade settlement
• Price bands restrictions
• Additional disclosure requirements

Movement to higher stages indicates continued concern about trading patterns, while entry into ESM indicates newly identified surveillance concerns.

Compliance Requirements

• Investors and traders must be aware of enhanced surveillance status when trading these securities
• Brokers must implement appropriate margin and settlement requirements as per ESM stage
• All trades in ESM securities subject to trade-for-trade settlement with no intraday leverage
• Market participants must comply with stricter price band limitations
• Enhanced disclosure and monitoring obligations for listed companies under ESM

Important Dates

• Effective Date: October 8, 2025 - All ESM changes come into effect
• Circular Date: October 7, 2025

Impact Assessment

Market Impact: High - ESM placement significantly affects liquidity and trading activity in affected securities. Securities under ESM typically experience reduced trading volumes due to stricter requirements.

Investor Impact: Investors holding these securities face:

• Reduced liquidity and difficulty in executing trades
• Higher margin requirements (up to 100% in some ESM stages)
• No intraday trading leverage
• Potential for wider bid-ask spreads

Trading Impact: Movement to higher ESM stages for Hi-Klass Trading, Omansh Enterprises, and Valiant Communications indicates persistent surveillance concerns and may result in further restrictions if patterns continue.

New Securities Entering ESM Stage I

*As per NSE alignment

Securities Moving to Higher ESM Stages

Consolidated ESM Securities List (Partial)

The circular provides a consolidated list of 27+ securities currently under ESM framework across Stage I and Stage II, including:

• A2Z Infra Engineering Ltd (Stage II)
• Aarvee Denims & Exports Ltd (Stage I)
• Andhra Cements Ltd (Stage II)
• Multiple SME scrips marked with # symbol
• Various securities flagged with * indicating NSE alignment

Impact Justification

High impact surveillance action affecting multiple securities with trading restrictions and price bands. Critical for investors holding these stocks as ESM stages impose stricter surveillance and trading limitations.