Description

BSE announces changes to Enhanced Surveillance Measure framework with securities being added, moved to higher/lower stages, and removed effective January 8, 2026.

Summary

BSE has announced updates to the Enhanced Surveillance Measure (ESM) framework effective January 8, 2026. Two securities are being newly added to ESM, four securities will move to higher ESM stages, and no securities are moving to lower stages or exiting the framework. The circular also provides a consolidated list of 27+ securities currently under ESM across different stages.

Key Points

  • 2 securities newly shortlisted for ESM: Gujarat Inject Kerala Ltd (524238) and Hardwyn India Ltd (541276)
  • 4 securities moving to higher ESM stages: Checkpoint Trends Ltd, Deccan Bearings Ltd, Onix Solar Energy Ltd, and Ramchandra Leasing & Finance Ltd
  • No securities moving to lower ESM stages
  • No securities exiting ESM framework (though some may move to SMP or IBC frameworks)
  • Changes effective from January 8, 2026
  • Consolidated list includes securities across ESM Stage I and Stage II

Regulatory Changes

The ESM framework is BSE’s surveillance mechanism to alert investors about securities showing abnormal price movements or other concerning patterns. Securities under ESM face additional restrictions including:

  • Trade-for-Trade (T2T) settlement
  • 100% upfront margin requirements
  • Price bands may be applicable
  • Additional disclosures required

Movement to higher ESM stages indicates continued concerns requiring stricter surveillance measures.

Compliance Requirements

  • Trading members must ensure compliance with ESM framework requirements for affected securities
  • 100% upfront margin collection mandatory for all ESM securities
  • Investors should be aware of enhanced surveillance status when trading these securities
  • Settlement will be on Trade-for-Trade basis for ESM securities
  • Brokers must provide appropriate risk disclosures to clients trading ESM securities

Important Dates

  • Effective Date: January 8, 2026 - All ESM changes take effect
  • Circular Date: January 7, 2026

Impact Assessment

Market Impact: High - ESM inclusion typically leads to reduced liquidity, wider bid-ask spreads, and potential price volatility as the market adjusts to stricter trading conditions.

Trading Impact: Securities newly added to ESM or moved to higher stages will face:

  • Reduced trading volumes due to T2T settlement requirements
  • Higher capital requirements from investors (100% upfront margin)
  • Potential investor exit due to enhanced surveillance stigma
  • Increased scrutiny from regulators and exchanges

Investor Impact: Existing investors in these securities should be aware of:

  • Reduced liquidity making exit more difficult
  • Potential price impact due to surveillance measures
  • Need for full upfront payment (no margin trading facility)
  • Signal of regulatory concern about the security

Operational Impact: Brokers and trading members need to update their systems to reflect ESM status changes and ensure proper margin collection and settlement processes are followed.

Impact Justification

ESM framework changes directly impact trading conditions and investor behavior for multiple securities, with potential significant price and liquidity implications