Description

BSE announces three securities moving into Graded Surveillance Measure (GSM) stages, placing trading restrictions on MFS Intercorp Ltd, Blue Chip India Ltd, and Karnawati Innovation Ltd.

Summary

BSE has announced the movement of three securities into their respective Graded Surveillance Measure (GSM) stages effective from this circular. GSM is a regulatory framework designed to protect investors from potential price manipulation and abnormal price movements in securities that exhibit suspicious trading patterns or poor fundamentals.

Key Points

  • Three securities are being moved into GSM stages as part of BSE’s ongoing surveillance mechanism.
  • MFS Intercorp Ltd (Code: 513721, ISIN: INE614F01019) is placed under GSM Stage I.
  • Blue Chip India Ltd (Code: 531936, ISIN: INE657B01025) is placed under GSM Stage II.
  • Karnawati Innovation Ltd (Code: 531671, ISIN: INE214D01021) is placed under GSM Stage III.
  • Securities marked (#) move to a lower GSM stage due to inclusion in the ESM (Enhanced Surveillance Measure) Framework.
  • Securities marked ($) move to a lower GSM stage due to inclusion in the IBC (Insolvency and Bankruptcy Code) Framework.

Regulatory Changes

Under the GSM framework, securities are classified into multiple stages (I through VI) based on their surveillance risk profile. Each stage imposes progressively stricter trading conditions, including:

  • Reduced price bands
  • Mandatory trade-for-trade settlement
  • Requirement for additional margins
  • Periodic review before reclassification or removal

Higher GSM stages (e.g., Stage III for Karnawati Innovation Ltd) indicate more severe restrictions compared to lower stages.

Compliance Requirements

  • Brokers and trading members must ensure clients are informed of the GSM status before executing trades in these securities.
  • Investors holding or intending to trade these securities must be aware of the applicable trading restrictions and settlement conditions specific to their GSM stage.
  • Trades in GSM-listed securities may require upfront margins and are subject to trade-for-trade settlement norms.

Important Dates

  • Effective Date: 2026-02-20 (date of circular issuance)
  • The GSM status of securities is reviewed periodically; upliftment from GSM stages is subject to improvement in surveillance parameters.

Impact Assessment

  • MFS Intercorp Ltd (GSM Stage I): Entry-level surveillance restrictions apply. Liquidity may be marginally impacted with tighter price bands.
  • Blue Chip India Ltd (GSM Stage II): Moderate restrictions with stricter settlement norms. Investors may face higher margin requirements, reducing trading activity.
  • Karnawati Innovation Ltd (GSM Stage III): Significant trading restrictions apply. The security will likely see a sharp reduction in trading volumes due to stringent surveillance conditions.
  • Overall, placement under GSM signals regulatory concern about these securities and may affect investor sentiment, potentially leading to reduced participation and liquidity across all three counters.

Impact Justification

GSM placement directly restricts trading activity for the affected securities, imposing significant constraints on investors and traders holding or intending to trade these stocks.