Description

BSE announces movement of 7 securities into higher stages of Graded Surveillance Measure framework for enhanced monitoring and surveillance.

Summary

BSE has announced the movement of 7 securities into higher stages of the Graded Surveillance Measure (GSM) framework. The GSM framework is a structured surveillance mechanism designed to enhance market integrity by monitoring securities that exhibit abnormal price movements or other concerns. Five securities are moving to GSM Stage II, one to Stage III, and one to Stage IV, which progressively impose stricter trading conditions.

Key Points

  • 5 securities moving to GSM Stage II: Lynx Machinery & Commercials Ltd (505320), Oswal Yarns Ltd (514460), South Asian Enterprises Ltd (526477), Aris International Ltd (531677), and Fraser And Company Limited (539032)
  • 1 security moving to GSM Stage III: Oswal Leasing Ltd (509099)
  • 1 security moving to GSM Stage IV: Adjia Technologies Limited (543269)
  • Securities in higher GSM stages face additional surveillance measures including price bands, trade-for-trade settlement, and other restrictions
  • Circular notes that securities marked with (#) move to lower GSM stages if included in ESM Framework
  • Securities marked with ($) move to lower GSM stages if included in IBC Framework

Regulatory Changes

The GSM framework operates in progressive stages with increasing restrictions:

  • Stage II: Enhanced monitoring with potential periodic call auctions
  • Stage III: Further restrictions on trading with 5% price band and trade-for-trade settlement
  • Stage IV: Most stringent surveillance with additional disclosure requirements and trading limitations

Movement to higher stages is based on factors such as high-low variation, client concentration, delivery percentage, and market capitalization.

Compliance Requirements

  • Trading members must ensure compliance with all GSM stage-specific requirements for affected securities
  • Investors should be aware that securities in higher GSM stages have restricted trading conditions
  • Orders in these securities may be subject to additional margin requirements and settlement obligations
  • Market participants must adhere to applicable price bands and trading mechanisms specific to each GSM stage

Important Dates

  • Effective Date: December 17, 2025 (date of circular issuance)
  • The movement to respective GSM stages takes effect from the date specified in the circular

Impact Assessment

Market Impact: The placement of these 7 securities in higher GSM stages will likely reduce trading volumes and liquidity due to stricter trading conditions. Stage IV placement for Adjia Technologies Limited represents the most severe surveillance level, which may significantly impact investor sentiment.

Investor Impact: Existing shareholders may face challenges in exiting positions due to reduced liquidity and trade-for-trade requirements. New investors should exercise caution as these securities are under enhanced surveillance for specific concerns.

Trading Impact: Higher GSM stages typically result in wider bid-ask spreads, reduced market depth, and potential difficulty in executing large orders. The trade-for-trade settlement requirement means full upfront margins and no intraday trading leverage.

Impact Justification

Affects 7 securities with increased surveillance requirements which may impact trading liquidity and investor participation in these stocks