Description

BSE updates the Enhanced Surveillance Measure (ESM) framework, adding securities with 100% margin requirements and Trade-for-Trade segment shift effective April 28, 2026, while moving some securities to lower Stage I and removing others from the framework.

Summary

BSE has issued an update to the Enhanced Surveillance Measure (ESM) framework effective late April 2026. New securities meeting ESM criteria will face a minimum 100% margin requirement and be shifted from the Rolling Settlement segment to the Trade-for-Trade segment. Securities moving to Stage II will additionally face a 2% price band and Periodic Call Auction mechanism. Some securities are being downgraded to Stage I, and others are being removed from the ESM framework entirely.

Key Points

  • Securities newly included under ESM (Annexure I) will attract a minimum 100% margin on all open positions as on April 27, 2026 and new positions from April 28, 2026
  • Certain securities will be moved to a lower Stage (Stage I) under the ESM Framework w.e.f. April 27, 2026
  • All ESM-qualifying securities will be shifted from Rolling Settlement to Trade-for-Trade segment w.e.f. April 28, 2026
  • Securities shifting to Stage II will be subject to Trade-for-Trade with a 2% price band and Periodic Call Auction w.e.f. April 27, 2026
  • Securities moving out of the ESM Framework w.e.f. April 27, 2026 are listed in Annexure II
  • A consolidated list of all securities under ESM is provided in Annexure III
  • ESM classification is a market surveillance action and should not be construed as an adverse action against the concerned company

Regulatory Changes

This notice updates the ESM framework established under earlier 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 framework continues to operate in conjunction with all other prevailing surveillance measures imposed by the exchanges.

Upon exit from the ESM framework, a scrip’s price band will be reinstated to the band applicable before ESM inclusion, unless the scrip remains under another surveillance measure — in which case the relevant surveillance framework’s price band prevails.

Compliance Requirements

  • Trading members must ensure compliance with the 100% margin requirement for affected securities from April 28, 2026
  • Members must note the shift to Trade-for-Trade settlement and adjust client-level margin and position management accordingly
  • For Stage II securities, members must accommodate the Periodic Call Auction mechanism and the 2% price band restriction
  • For clarifications, members may contact BSE Surveillance at bse.surv@bseindia.com

Important Dates

  • April 27, 2026: Stage I downgrade effective; Stage II Trade-for-Trade + 2% price band + Periodic Call Auction effective; ESM exits effective
  • April 28, 2026: 100% margin requirement effective on open positions and new positions; Rolling Settlement to Trade-for-Trade shift effective

Impact Assessment

The ESM update has a high operational and liquidity impact on affected securities. The 100% margin requirement drastically increases the cost of holding or taking positions in ESM-listed stocks, typically leading to reduced trading volumes and liquidity. The move to Trade-for-Trade eliminates netting benefits and intraday trading flexibility. For Stage II securities, the 2% price band further limits price discovery and the Periodic Call Auction replaces continuous trading — making these stocks significantly harder to exit or enter for investors. The overall market impact is limited to the specific securities listed in the annexures, but individual investors and traders holding these stocks may face substantial margin calls and liquidity constraints.

Impact Justification

Routine periodic ESM update but carries high impact for affected securities due to 100% margin requirement, shift to Trade-for-Trade segment, and 2% price band for Stage II securities — significantly restricting liquidity and trading flexibility.