Description

BSE notifies securities being moved to higher Graded Surveillance Measure (GSM) stages effective April 8, 2026, attracting stricter trading restrictions including trade-to-trade settlement, reduced price bands, and Additional Surveillance Deposits.

Summary

BSE has notified trading members that certain securities (listed in the attached Annexure) will be moved to higher stages of the Graded Surveillance Measure (GSM) framework effective April 8, 2026. This move is in continuation of the GSM framework established via Exchange notice no. 20170223-44 dated February 23, 2017, and subsequent updates. Affected securities will attract stricter surveillance actions based on their respective GSM stage.

Key Points

  • Securities per the attached Annexure will be moved to higher GSM stages from April 8, 2026
  • Settlement for affected securities will be on a trade-to-trade basis with no netting off allowed
  • Trading restrictions escalate progressively from Stage I to Stage IV
  • Buyers in Stage II and above must deposit Additional Surveillance Deposit (ASD)
  • Trading members are advised to take adequate precautions while trading in these securities
  • Queries can be directed to bse.surv@bseindia.com

Regulatory Changes

Securities are being elevated to higher GSM stages under the existing GSM Framework (first published February 23, 2017, last updated November 17, 2023). The four-stage surveillance action framework is as follows:

  • Stage I: 100% applicable margin rate and price band of 5% or lower
  • Stage II: Trade-to-trade with 5% or lower price band; ASD of 50% of trade value to be deposited by buyers
  • Stage III: Trade-to-trade with 5% or lower price band; trading permitted once a week (every Monday/1st trading day); ASD of 100% of trade value to be deposited by buyers
  • Stage IV: Trade-to-trade with 5% or lower price band; trading permitted once a week (every Monday/1st trading day); ASD of 100% of trade value to be deposited by buyers; no upward price movement permitted

Compliance Requirements

  • Trading members must note the updated GSM stage classifications for the securities in the Annexure
  • Buyers in Stage II securities must deposit ASD equal to 50% of trade value
  • Buyers in Stage III and Stage IV securities must deposit ASD equal to 100% of trade value
  • No netting off is permitted; all trades must be settled on a trade-to-trade basis
  • Members must exercise adequate caution while facilitating trades in these securities
  • Members may refer to the GSM FAQ at http://www.bseindia.com/markets/equity/EQReports/graded_surveil_measure.aspx?expandable=6

Important Dates

  • April 7, 2026: Notice issued
  • April 8, 2026: Effective date — securities moved to higher GSM stages and new surveillance actions apply

Impact Assessment

The elevation of securities to higher GSM stages significantly curtails their liquidity and tradability. Stage III and IV securities are restricted to once-a-week trading (Mondays), making them highly illiquid. The mandatory ASD requirement (up to 100% of trade value) raises the cost of buying these securities substantially, discouraging speculative activity. The trade-to-trade settlement requirement eliminates intraday netting, increasing the settlement burden on participants. Stage IV securities face the additional restriction of no upward price movement, effectively capping any potential gains. Collectively, these measures are designed to protect investors from excessive speculation in potentially risky or manipulated securities.

Impact Justification

Securities moved to higher GSM stages face severe trading restrictions including mandatory trade-to-trade settlement, 5% price bands, weekly trading limits, and ASD up to 100% of trade value, significantly impacting liquidity and investor participation.