Description

BSE updates the list of securities under Enhanced Surveillance Measure (ESM) framework with additions, stage changes, and exits effective January 19, 2026.

Summary

BSE has issued an update to the Enhanced Surveillance Measure (ESM) framework effective January 19, 2026. The circular identifies securities being newly added to ESM, securities moving to higher or lower ESM stages, and securities exiting the ESM framework. The ESM framework is designed to alert investors about securities exhibiting abnormal price movements or unusual trading patterns.

Key Points

  • 3 securities newly shortlisted for ESM framework: Krishna Ventures Ltd, Manaksia Aluminium Company Ltd, and Tirth Plastic Ltd
  • 4 securities moving to higher ESM stages: Kinetic Trust Ltd, Nagpur Power & Industries Ltd, Trade Wings Ltd, and Vipul Ltd
  • 11 securities moving to lower ESM stages including Arunjyoti Bio Ventures Ltd, Bluegod Entertainment Ltd, and others
  • 19 securities moving out of ESM framework entirely including Century Extrusions Ltd, Visa Steel Ltd, and We Win Ltd
  • Changes effective from January 19, 2026
  • Some securities exiting ESM due to inclusion in SMP Framework or IBC Framework
  • Multiple SME scrips included in the various categories

Regulatory Changes

The ESM framework applies additional surveillance measures to securities exhibiting concerning trading patterns. Securities in ESM are subject to:

  • Additional disclosure requirements
  • Price bands and trading restrictions
  • Reduced position limits
  • 100% upfront margin requirements
  • Trade-to-trade settlement

Movement to higher ESM stages intensifies these restrictions, while movement to lower stages or exit from ESM relaxes them.

Compliance Requirements

  • Investors and traders must be aware of ESM status changes for affected securities
  • Brokers must ensure compliance with enhanced margin and settlement requirements for ESM securities
  • Trading members should update their risk management systems to reflect new ESM classifications
  • Market participants must adhere to stricter position limits and trading conditions for securities moving to higher ESM stages

Important Dates

  • January 16, 2026: Circular issued
  • January 19, 2026: All ESM changes become effective

Impact Assessment

Trading Impact: Securities entering ESM or moving to higher stages will face reduced liquidity due to stricter trading conditions and 100% margin requirements. This typically results in lower trading volumes and wider bid-ask spreads.

Investor Impact: Retail investors holding these securities will face higher capital requirements for new positions and may experience difficulty exiting positions due to reduced liquidity. Securities exiting ESM will see improved trading conditions and potentially better liquidity.

Market Sentiment: ESM designation serves as a warning signal about potential risks, which may negatively impact investor sentiment for affected securities. Conversely, exit from ESM framework indicates normalization of trading patterns.

Operational Impact: Brokers and trading systems must update margin requirements, position limits, and settlement cycles for 37 securities across multiple categories.

Impact Justification

Impacts trading conditions for 37 securities with ESM additions, stage changes, and exits affecting liquidity and investor access