Description

BSE updates Enhanced Surveillance Measure framework with new securities additions, stage movements, and consolidated list of securities under ESM effective October 15, 2025.

Summary

BSE has issued updates to the Enhanced Surveillance Measure (ESM) framework effective October 15, 2025. The circular identifies 3 new securities being added to ESM, 3 securities moving to higher ESM stages, and provides a consolidated list of all securities currently under ESM framework. No securities are being removed from the ESM framework in this update.

Key Points

  • 3 new securities shortlisted in ESM Framework: Candour Techtex Ltd, Cubical Financial Services Ltd, and Dharani Finance Ltd
  • 3 securities moving to higher ESM stages: Shree Krishna Paper Mills & Industries Ltd, Systematix Securities Ltd, and Women Networks Ltd
  • No securities moving to lower ESM stages
  • No securities moving out of ESM Framework
  • Consolidated list includes 26+ securities across various ESM stages
  • Changes effective from October 15, 2025

Regulatory Changes

The ESM framework continues to operate with stage-based surveillance where securities can move between stages based on market behavior and risk parameters. Securities under ESM are subject to:

  • Enhanced monitoring and surveillance
  • Potential trading restrictions including Trade-for-Trade (T2T) settlement
  • Price bands and position limits
  • Additional disclosure requirements

Securities may move between ESM stages or exit the framework based on improvement in trading patterns or be moved to other frameworks like SMP (Securities in Movement Phase) or IBC (Insolvency and Bankruptcy Code) framework.

Compliance Requirements

  • Trading members must be aware of securities under ESM and applicable restrictions
  • Investors should note that ESM securities may have limited liquidity due to T2T settlement
  • Compulsory delivery-based settlement applies to ESM securities
  • Members must ensure compliance with stage-specific surveillance measures
  • Risk management systems should be updated to reflect ESM classifications

Important Dates

  • Effective Date: October 15, 2025 - All ESM changes become applicable

Impact Assessment

Market Impact: The addition of 3 new securities to ESM and movement of 3 securities to higher stages indicates increased surveillance due to market volatility, price movements, or other risk factors. This will result in reduced liquidity for affected securities.

Trading Impact: Securities under ESM are subject to Trade-for-Trade settlement, eliminating intraday trading opportunities and requiring full upfront margin. This typically reduces trading volumes and volatility.

Investor Impact: Investors holding or trading these securities will face:

  • Compulsory delivery obligations
  • Reduced liquidity and wider bid-ask spreads
  • Longer settlement cycles
  • Potential difficulty in exiting positions

Risk Assessment: The ESM framework is designed to protect investor interests by identifying and monitoring securities with abnormal price movements or trading patterns. The continued monitoring of 26+ securities suggests ongoing market surveillance concerns in these counters.

Impact Justification

Regular surveillance measure update affecting multiple securities with enhanced trading restrictions. Impacts liquidity and trading patterns for listed securities.