Description
BSE is moving specified securities to higher Graded Surveillance Measure (GSM) stages effective April 27, 2026, imposing enhanced margin requirements, trade-to-trade settlement, and trading frequency restrictions depending on the assigned stage.
Summary
BSE has issued Notice No. 20260424-28 dated April 24, 2026, notifying 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 27, 2026. The GSM framework, originally published on February 23, 2017 and subsequently updated, imposes progressively stricter surveillance actions on securities based on their assigned stage.
Key Points
- Securities listed in the Annexure will be escalated to higher GSM stages with effect from April 27, 2026
- Four GSM stages apply, each with progressively stringent restrictions
- All affected securities will be settled on a trade-to-trade basis with no netting off allowed
- Trading members are advised to exercise adequate caution while trading in these securities
- Queries can be directed to bse.surv@bseindia.com or the BSE GSM FAQ page
Regulatory Changes
The GSM framework escalation introduces the following stage-wise surveillance actions:
| Stage | Surveillance Actions |
|---|---|
| Stage I | Applicable margin rate of 100% and price band of 5% or lower as applicable |
| Stage II | Trade-for-trade with 5% or lower price band and Additional Surveillance Deposit (ASD) of 50% of trade value to be deposited by buyers |
| Stage III | Trade-for-trade with 5% or lower price band, trading permitted once a week (every Monday/1st trading day), and ASD of 100% of trade value deposited by buyers |
| Stage IV | Same as Stage III with the additional restriction of no upward price movement allowed |
Compliance Requirements
- Trading Members: Must note the securities being moved to higher GSM stages and ensure compliance with respective stage restrictions from April 27, 2026
- Buyers: Must deposit the applicable Additional Surveillance Deposit (ASD) — 50% of trade value for Stage II, 100% for Stages III and IV
- Settlement: No netting off permitted; all trades must be settled on a trade-to-trade basis
- Members should refer to the GSM FAQ at: http://www.bseindia.com/markets/equity/EQReports/graded_surveil_measure.aspx?expandable=6
Important Dates
- Notice Date: April 24, 2026
- Effective Date: April 27, 2026 (securities moved to higher GSM stages)
Impact Assessment
The escalation of securities into higher GSM stages has significant market and operational impact:
- Liquidity Impact: Trade-to-trade settlement and weekly trading restrictions (Stages III & IV) drastically reduce liquidity in affected securities
- Cost Impact: Mandatory ASD requirements (50%–100% of trade value) substantially increase the cost of buying these securities
- Price Discovery: 5% or lower price bands limit daily price movement, constraining normal price discovery
- Investor Risk: Stage IV’s prohibition on upward price movement effectively traps buyers, increasing downside risk
- Operational Impact: Trading members must update systems to enforce ASD collection and trade-to-trade settlement for all affected securities
- The circular references the broader GSM framework established through multiple prior notices (2017–2023), indicating this is part of BSE’s ongoing active surveillance program targeting securities with unusual price/volume behavior
Impact Justification
GSM stage escalation imposes severe trading restrictions including 100% margins, trade-to-trade settlement, weekly trading limits, and additional surveillance deposits of up to 100% of trade value, significantly impacting liquidity and trading in affected securities.