Description
BSE notifies trading members that certain securities will be moved to higher GSM stages effective April 16, 2026, attracting enhanced surveillance actions including trade-to-trade settlement, price bands of 5% or lower, and Additional Surveillance Deposits.
Summary
BSE has issued a notice moving certain securities to higher stages of the Graded Surveillance Measure (GSM) framework effective April 16, 2026. The move is in reference to prior exchange notices establishing the GSM framework (originally published February 23, 2017 and updated through November 17, 2023). The list of affected securities is provided in an attached Annexure. Trading members are urged to exercise adequate caution when trading in these securities.
Key Points
- Securities listed in the Annexure will be moved to their respective higher GSM stages from April 16, 2026
- Settlement for all affected securities will be on a trade-to-trade (T2T) basis with no netting off allowed
- GSM stages carry progressively stringent surveillance actions from Stage I through Stage IV
- Buyers in Stage II, III, and IV are required to deposit Additional Surveillance Deposits (ASD)
- Trading members should refer to the BSE FAQ on GSM or contact bse.surv@bseindia.com for clarifications
Regulatory Changes
The GSM framework, originally established via Exchange Notice No. 20170223-44 dated February 23, 2017, classifies securities into surveillance stages based on risk parameters. This notice operationalises a further escalation of affected securities to higher stages. The staged actions are as follows:
| Stage | Surveillance Actions |
|---|---|
| I | 100% applicable margin rate AND price band of 5% or lower |
| II | Trade-to-trade with 5% price band or lower AND Additional Surveillance Deposit (ASD) of 50% of trade value deposited by Buyers |
| III | Trade-to-trade with 5% price band or lower AND trading permitted once a week (every Monday / 1st trading day of the week) AND ASD of 100% of trade value deposited by Buyers |
| IV | Trade-to-trade with 5% price band or lower AND trading permitted once a week (every Monday / 1st trading day of the week) AND ASD of 100% of trade value deposited by Buyers with no upward price movement |
Compliance Requirements
- Trading Members: Must take adequate precautions while trading in GSM-listed securities; no netting off is permitted as all trades will settle on a trade-to-trade basis
- Buyers (Stage II): Must deposit ASD of 50% of trade value
- Buyers (Stage III & IV): Must deposit ASD of 100% of trade value
- Stage III & IV Securities: Trading is restricted to once per week (every Monday or the first trading day of the week)
- Members must 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 for clarifications
Important Dates
- Notice Date: April 15, 2026
- Effective Date: April 16, 2026 — Securities in Annexure will be moved to their respective higher GSM stages
- Trading Restriction Day: Every Monday (or first trading day of the week) for Stage III and Stage IV securities
Impact Assessment
The escalation of securities to higher GSM stages has significant implications for market participants:
- Liquidity Impact: Securities in Stage III and IV can only be traded once a week, drastically reducing liquidity and the ability to exit positions
- Cost Impact: Mandatory ASD requirements of 50%–100% of trade value increase the capital burden on buyers substantially
- Price Discovery: Strict 5% or lower price bands combined with no upward movement restrictions at Stage IV effectively cap price appreciation
- Settlement Risk: Trade-to-trade settlement with no netting increases operational burden and settlement obligations for members
- Investor Caution: Retail and institutional investors holding or considering positions in affected securities face heightened risk due to restricted exit options and mandatory deposits
- The exact list of affected securities is in the Annexure (Annexure_GSM) attached to the original notice PDF
Impact Justification
Securities moved to higher GSM stages face severe trading restrictions including mandatory trade-to-trade settlement, 100% margins, 5% price bands, weekly trading limits, and Additional Surveillance Deposits of up to 100% of trade value — significantly impacting liquidity and investor activity in affected scrips.