Description

BSE updates Enhanced Surveillance Measure framework with 9 securities entering ESM, 3 securities moving to higher stages, and consolidated list of all ESM securities effective February 6, 2026.

Summary

BSE has announced changes to the Enhanced Surveillance Measure (ESM) framework effective February 6, 2026. Nine securities are being newly placed under ESM Stage I, three existing ESM securities are being moved to higher stages, and no securities are exiting the framework. The circular also provides a consolidated list of 22 securities currently under various ESM stages. ESM framework subjects securities to additional monitoring and trading restrictions based on concerns about price volatility, corporate governance, or other market integrity issues.

Key Points

  • 9 securities entering ESM framework: B2B Software Technologies, DJ Mediaprint & Logistics, HRS Aluglaze, J.A. Finance, Murae Organisor, Sancode Technologies, Sheetal Cool Products, Taparia Tools, and Vivid Mercantile
  • 3 securities moving to higher ESM stages: Anirit Ventures, Continental Controls, and SVP Global Textiles
  • No securities are moving to lower ESM stages or exiting the framework
  • HRS Aluglaze and Sancode Technologies are SME scrips
  • DJ Mediaprint & Logistics and Sheetal Cool Products marked as per NSE alignment
  • Consolidated list shows securities distributed across ESM Stage I and Stage II

Regulatory Changes

The Enhanced Surveillance Measure framework continues BSE’s practice of placing securities under additional surveillance when they exhibit characteristics warranting closer monitoring. Higher ESM stages typically involve stricter trading restrictions such as:

  • Trade-for-Trade (T2T) settlement with no intraday trading
  • Additional margin requirements
  • Price bands may be narrower
  • Increased disclosure requirements

Progression through ESM stages (Stage I to higher stages) occurs when surveillance concerns persist or intensify.

Compliance Requirements

For Market Participants:

  • Review holdings in affected securities before February 6, 2026
  • Adjust trading strategies to account for ESM restrictions (T2T settlement, delivery-based trading only)
  • Ensure adequate margin availability for positions in ESM securities
  • Monitor corporate announcements from listed companies for clarifications

For Listed Companies:

  • Companies under ESM should provide timely disclosures to address market concerns
  • Consider taking corrective actions to improve corporate governance and reduce volatility

For Brokers:

  • Update risk management systems to reflect ESM categorization
  • Inform clients holding or trading these securities about restrictions
  • Apply appropriate margin collection as per ESM norms

Important Dates

  • Effective Date: February 6, 2026 - All ESM changes become applicable
  • Circular Date: February 5, 2026

Impact Assessment

Market Impact:

  • Limited liquidity in affected securities due to T2T restrictions and potential investor caution
  • Price discovery may be affected as intraday trading is restricted
  • Speculative trading activity will be curtailed in these securities

Investor Impact:

  • Existing shareholders face reduced liquidity and may experience difficulty exiting positions
  • Mandatory delivery-based settlement requires full payment/delivery
  • Higher transaction costs due to additional margins
  • Increased reputational risk associated with holding ESM securities

Operational Impact:

  • Brokers must update systems and client communications
  • Clearing corporations will apply enhanced margin collection
  • Reduced trading volumes expected in affected securities

Stage Progression Impact: The three securities moving to higher ESM stages (Anirit Ventures, Continental Controls, SVP Global Textiles) face stricter restrictions, indicating persistent surveillance concerns. This typically leads to further decline in trading interest and liquidity.

Impact Justification

Regular surveillance framework update affecting 12 securities with trading restrictions; material for investors holding these stocks but routine regulatory measure