Description

BSE updates the Enhanced Surveillance Measure (ESM) framework, adding new securities with 100% margin requirement effective April 16, 2026, and moving select securities to Stage I or out of the framework effective April 15, 2026.

Summary

BSE has updated the Enhanced Surveillance Measure (ESM) framework as of April 13, 2026. Securities newly added to ESM will attract a minimum 100% margin on all open and new positions effective April 16, 2026, and will be shifted from Rolling Settlement to Trade-for-Trade segment. Securities downgraded to Stage I will move effective April 15, 2026, while Stage II securities will trade under a 2% price band with Periodic Call Auction. Some securities are also exiting the ESM framework effective April 15, 2026.

Key Points

  • New securities added to ESM (per Annexure I) will attract minimum 100% margin effective April 16, 2026, on all open positions as of April 15, 2026 and new positions from April 16, 2026
  • Select securities in ESM will be moved to lower Stage I of the ESM framework effective April 15, 2026
  • All ESM-qualifying securities will be shifted from Rolling Settlement to Trade-for-Trade segment effective April 16, 2026
  • Securities moving to Stage II will trade under Trade-for-Trade with a 2% price band and Periodic Call Auction effective April 15, 2026
  • Securities exiting the ESM framework effective April 15, 2026 are listed in Annexure II
  • A consolidated list of all securities currently under ESM is provided in Annexure III
  • ESM classification is purely a surveillance measure and should not be construed as an adverse action against the concerned company

Regulatory Changes

This notice is issued with reference to prior ESM framework notices: 20230602-44 (June 2, 2023), 20230718-46 (July 18, 2023), 20240809-42 (August 9, 2024), 20240920-63 (September 20, 2024), 20241004-65 (October 4, 2024), and 20250725-61 (July 25, 2025). The current update reflects the periodic review of securities under the ESM framework and adjusts the list of included securities and their respective stages.

Compliance Requirements

  • Brokers/Members: Must ensure minimum 100% margin is collected on all open and new positions in newly added ESM securities from April 16, 2026
  • Market Participants: Must note the shift to Trade-for-Trade settlement for ESM securities and adjust trading strategies accordingly
  • Stage II Securities: Must comply with 2% price band and Periodic Call Auction trading mechanism
  • Exiting Securities: Price band for securities exiting ESM will be reinstated to the pre-ESM price band, unless the security is under another surveillance measure (in which case that measure’s price band applies)
  • Members may direct clarification queries to bse.surv@bseindia.com

Important Dates

  • April 13, 2026: Notice issuance date
  • April 15, 2026: Effective date for Stage I downgrade of select securities and exit of securities from ESM framework; Stage II securities move to 2% price band with Periodic Call Auction
  • April 16, 2026: Effective date for 100% margin requirement on new ESM securities; shift from Rolling Settlement to Trade-for-Trade segment

Impact Assessment

The ESM update has a high market impact for affected securities. Securities newly added to ESM face severely restrictive trading conditions — mandatory 100% margin eliminates leverage, and Trade-for-Trade settlement prevents netting of positions, significantly reducing liquidity. Stage II securities face additional restrictions with a narrow 2% price band and Periodic Call Auction, limiting price discovery. Conversely, securities exiting the framework or moving to Stage I will see eased conditions and improved tradability. Market participants holding positions in affected securities should reassess exposure given the abrupt change in margin and settlement requirements effective April 15–16, 2026.

Impact Justification

Mandatory 100% margin requirement and shift to Trade-for-Trade segment significantly impacts trading conditions for affected securities; multiple securities added, moved between stages, or removed from ESM framework.