Description

BSE announces inclusion of securities under Enhanced Surveillance Measure (ESM) attracting 100% margin from April 20, 2026, along with stage movements and exclusions from the ESM framework effective April 17, 2026.

Summary

BSE has updated the Enhanced Surveillance Measure (ESM) framework, announcing the inclusion of new securities attracting a minimum 100% margin requirement effective April 20, 2026. Additionally, certain securities are being moved to Stage I (lower stage) within the ESM framework, while others are being excluded from the framework entirely, both effective April 17, 2026. The notice references a series of prior ESM notices dating back to June 2023.

Key Points

  • New securities (Annexure I) included under ESM shall attract minimum 100% margin on all open positions as on April 17, 2026 and new positions from April 20, 2026
  • Certain ESM securities are being moved to a lower stage (Stage I) within the framework effective April 17, 2026
  • Securities qualifying under ESM will be shifted from Rolling Settlement to Trade-for-Trade segment effective April 20, 2026
  • Securities moving to Stage II will be subject to Trade-for-Trade with a 2% price band and Periodic Call Auction effective April 17, 2026
  • A consolidated list of all securities under the ESM framework is provided in Annexure III
  • Securities exiting the ESM framework (Annexure II) are effective April 17, 2026
  • ESM operates alongside all other prevailing surveillance measures imposed by exchanges
  • Shortlisting under ESM is purely for market surveillance and should not be construed as adverse action against the concerned company

Regulatory Changes

  • Securities newly included in ESM must comply with 100% margin requirements
  • Stage II ESM securities face a restrictive 2% price band and Periodic Call Auction mechanism
  • Transition from Rolling Settlement to Trade-for-Trade settlement segment for ESM-included securities
  • Upon exit from ESM, the price band reverts to the pre-ESM applicable band, unless the scrip remains under another surveillance measure

Compliance Requirements

  • Trading members must ensure collection of minimum 100% margin on all open positions in ESM securities as on April 17, 2026
  • Members must adhere to Trade-for-Trade settlement obligations for ESM-included securities from April 20, 2026
  • Members trading in Stage II ESM securities must comply with the 2% price band and Periodic Call Auction rules
  • For clarifications, members may contact BSE Surveillance at bse.surv@bseindia.com

Important Dates

  • April 16, 2026: Notice date
  • April 17, 2026: Effective date for Stage I downgrade of certain securities and exclusion of securities from ESM framework
  • April 17, 2026: 100% margin applicable on all open positions in newly included ESM securities
  • April 20, 2026: Newly included ESM securities shift to Trade-for-Trade segment; 100% margin on new positions
  • April 20, 2026: Stage II securities subject to 2% price band and Periodic Call Auction

Impact Assessment

The ESM framework update has significant trading implications for affected securities. Securities newly included in ESM face a dramatic increase in margin requirements (minimum 100%), which can substantially reduce liquidity and increase the cost of holding positions. The shift from Rolling Settlement to Trade-for-Trade settlement eliminates netting benefits and requires full delivery, further constraining trading activity. Stage II ESM securities face the most restrictive conditions with a narrow 2% price band and Periodic Call Auction, severely limiting price discovery and intraday trading. Securities exiting the ESM framework will see a restoration of normal trading conditions, improving liquidity. Market participants should review the attached Annexures I, II, and III to identify specific securities affected and adjust their trading and risk management strategies accordingly.

Impact Justification

ESM framework imposes stringent trading conditions including 100% margin requirements, shift to Trade-for-Trade settlement, and price band restrictions affecting multiple securities. This directly impacts liquidity and trading strategies for affected stocks.