Description

BSE announces changes to Enhanced Surveillance Measure (ESM) framework including new securities shortlisted, securities moving to higher stages, and consolidated list of all securities under ESM effective December 31, 2025.

Summary

BSE has announced updates to the Enhanced Surveillance Measure (ESM) Framework effective December 31, 2025. Five securities have been newly shortlisted for ESM inclusion: Axita Cotton Ltd, Coromandel Engineering Company Ltd, Croissance Ltd, Getalong Enterprise Ltd, and L. T. Elevator Ltd. Additionally, two securities (Aadi Industries Ltd and Shish Industries Ltd) will move to higher ESM stages. No securities are moving to lower stages or exiting the framework at this time. The consolidated list shows 26 securities across various ESM stages.

Key Points

  • 5 new securities added to ESM Framework effective December 31, 2025
  • 2 securities escalated to higher ESM stages (Aadi Industries Ltd and Shish Industries Ltd)
  • No securities moving to lower ESM stages
  • No securities exiting ESM Framework in this update
  • Consolidated list includes 26 securities under various ESM stages
  • Includes both mainboard and SME scrips (marked with #)

Regulatory Changes

The Enhanced Surveillance Measure (ESM) Framework is designed to alert investors about securities exhibiting abnormal price movements or other risk indicators. Securities under ESM face:

  • Trade-for-trade settlement (no intraday trading)
  • 100% upfront margin requirements
  • Enhanced disclosure requirements
  • Stage-wise escalation based on continued surveillance triggers
  • Potential additional restrictions at higher ESM stages

Compliance Requirements

For Trading Members:

  • Collect 100% upfront margins from clients for ESM securities
  • Ensure trade-for-trade settlement for all ESM transactions
  • Inform clients about ESM status of securities
  • Monitor and report unusual trading patterns

For Investors:

  • Provide full upfront payment for purchases
  • Cannot conduct intraday trading in ESM securities
  • Must take/give delivery of shares (no squaring off positions)
  • Exercise enhanced due diligence before trading

For Listed Companies:

  • Provide timely disclosures to address price movements
  • Cooperate with exchange inquiries
  • Work to address concerns leading to ESM inclusion

Important Dates

  • December 31, 2025: Effective date for all ESM framework changes
  • Securities will be subject to ESM conditions from market opening on this date

Newly Affected Securities (Annexure I)

New ESM Inclusions:

  1. Axita Cotton Ltd (Scrip: 542285, ISIN: INE02EZ01022)
  2. Coromandel Engineering Company Ltd (Scrip: 533167, ISIN: INE312J01012)
  3. Croissance Ltd (Scrip: 531909, ISIN: INE587J01027)
  4. Getalong Enterprise Ltd (Scrip: 543372, ISIN: INE0H1201020) - SME Scrip
  5. L. T. Elevator Ltd (Scrip: 544518, ISIN: INE0TJ801010) - SME Scrip

Moving to Higher ESM Stage:

  1. Aadi Industries Ltd (Scrip: 530027, ISIN: INE563D01013) - Moving to Stage II
  2. Shish Industries Ltd (Scrip: 540693, ISIN: INE145Y01023)

Impact Assessment

Market Impact:

  • Reduced liquidity for affected securities due to trade-for-trade requirements
  • Potential price volatility as investors adjust positions
  • Limited participation from short-term traders and speculators
  • Heightened investor caution and risk assessment

Investor Impact:

  • Higher capital requirements (100% upfront margins)
  • Loss of intraday trading opportunities
  • Mandatory delivery obligations
  • Increased transaction scrutiny
  • Potential difficulty in entering/exiting positions

Operational Impact:

  • Trading members must update systems and processes
  • Enhanced monitoring and compliance workload
  • Risk management adjustments required
  • Client communication and education needed

Long-term Implications:

  • Companies may face reputational concerns
  • Potential impact on stock valuations
  • Pressure on companies to improve governance and disclosures
  • Stage escalation could lead to additional restrictions
  • Path to normal trading requires addressing underlying concerns

Impact Justification

ESM framework changes directly impact trading conditions and liquidity for multiple securities. High severity due to enhanced surveillance measures that restrict trading and increase compliance requirements for affected stocks.