Description
BSE moves select securities to higher Graded Surveillance Measure (GSM) stages effective April 13, 2026, imposing stricter trading restrictions including trade-for-trade settlement, enhanced margins, and Additional Surveillance Deposits.
Summary
BSE has announced the movement of select securities to higher stages of the Graded Surveillance Measure (GSM) framework, effective April 13, 2026. The move is in reference to a series of prior exchange notices from 2017 through 2023 establishing the GSM framework. Affected securities are listed in Annexure_GSM attached to the notice. Trading members must take precautionary measures when dealing in these securities as settlement will be strictly on a trade-to-trade basis with no netting off permitted.
Key Points
- Securities as per Annexure_GSM will be moved to higher GSM stages from April 13, 2026
- No netting off of positions is permitted; all settlement is on trade-to-trade basis
- Four distinct GSM stages apply, each with progressively stricter surveillance actions
- Additional Surveillance Deposit (ASD) applies at Stages II, III, and IV
- Trading frequency is restricted to once per week (every Monday or first trading day) at Stages III and IV
- Price bands are capped at 5% or lower across all four stages
- Trading members are advised to exercise adequate caution when trading in affected securities
Regulatory Changes
The GSM framework being applied here was originally published on February 23, 2017 and subsequently updated. The current notice moves specific securities into higher GSM stages under this framework:
| Stage | Key Surveillance Actions |
|---|---|
| I | 100% margin rate; price band of 5% or lower |
| II | Trade-for-trade; 5% price band; ASD of 50% of trade value (buyers) |
| III | Trade-for-trade; 5% price band; weekly trading (Monday only); ASD of 100% of trade value (buyers) |
| IV | Trade-for-trade; 5% price band; weekly trading (Monday only); ASD of 100% of trade value (buyers); no upward price movement |
Compliance Requirements
- Trading Members: Must note the securities listed in Annexure_GSM and apply the applicable GSM stage restrictions from April 13, 2026
- Buyers: Must deposit Additional Surveillance Deposit (ASD) — 50% of trade value at Stage II, 100% at Stages III and IV
- Settlement: All trades in affected securities must be settled on a trade-to-trade basis; no netting off is allowed
- Risk Management: Members must take adequate precautions while trading in GSM securities
- Queries: Members may refer to the GSM FAQ at http://www.bseindia.com/markets/equity/EQReports/graded_surveil_measure.aspx?expandable=6 or write to bse.surv@bseindia.com
Important Dates
- Notice Date: April 10, 2026
- Effective Date: April 13, 2026 (Monday — first trading day of the following week)
Impact Assessment
This circular has high market impact for the securities listed in the attached Annexure. Affected stocks face significantly restricted trading conditions that typically reduce liquidity and may create adverse price dynamics:
- Liquidity Impact: Trade-to-trade settlement eliminates intraday netting, increasing the cost of trading and reducing speculative activity
- Capital Requirements: ASD obligations of up to 100% of trade value substantially increase capital requirements for buyers, further dampening demand
- Price Impact: Stage IV securities face a no-upward-movement restriction in addition to the 5% price band, creating asymmetric trading constraints
- Frequency Restriction: Stages III and IV limit trading to once per week, severely constraining exit options for existing holders
- Investor Caution: The GSM framework signals regulatory concern about the price behavior and fundamentals of affected companies; investors should conduct enhanced due diligence
Impact Justification
Directly restricts trading in affected securities with significant operational changes including mandatory trade-for-trade settlement, higher margins up to 100%, weekly trading limits, and Additional Surveillance Deposits up to 100% of trade value. Effective within 3 days of notice.