Description

BSE notice applying minimum 35% margin requirement in Equity and Equity Derivatives segments for securities with high promoter encumbrance effective May 5, 2026, with some securities exiting the framework from April 30, 2026.

Summary

BSE has issued a surveillance notice (Notice No. 20260429-30) under the High Encumbrance framework as per Regulation 28(3) of SEBI (SAST) Regulations 2011. Securities in Annexure I will attract a minimum 35% margin in Equity and Equity Derivatives segments from May 5, 2026, while securities in Annexure II are eligible to exit the framework effective April 30, 2026. A consolidated list of all securities under the framework is provided in Annexure III.

Key Points

  • Securities listed in Annexure I are newly included under the High Encumbrance Surveillance Measure
  • A minimum margin of 35% will apply in both Equity and Equity Derivatives segments
  • The 35% margin applies to all open positions as on May 4, 2026 and new positions created from May 5, 2026
  • Securities in Annexure II are eligible to exit the framework effective April 30, 2026
  • This measure operates in conjunction with all other prevailing surveillance measures
  • Inclusion is based solely on market surveillance grounds and is not an adverse action against the company
  • Company representations regarding framework placement must be submitted by 5:00 PM on April 6, 2026

Regulatory Changes

This notice is a continuation of earlier Exchange notices — No. 20191024-30 (October 24, 2019) and No. 20200417-31 (April 17, 2020) — on the same subject. No new regulatory framework is introduced; this is a periodic review update adding and removing securities from the existing High Encumbrance Surveillance Measure under SEBI (SAST) Regulation 28(3).

Compliance Requirements

  • Trading members must ensure a minimum 35% margin is collected/maintained for securities in Annexure I in both Equity and Equity Derivatives segments
  • Margin requirement applies to open positions as of May 4, 2026 and all new positions from May 5, 2026
  • Members should refer to the attached Annexure lists (I, II, III) to identify affected securities
  • Any company seeking to contest its inclusion must submit a representation to BSE by 5:00 PM on April 6, 2026
  • For clarifications, members may contact bse.surv@bseindia.com

Important Dates

  • April 29, 2026: Notice date
  • April 30, 2026: Effective date for securities in Annexure II to exit the framework
  • May 4, 2026: Reference date for open positions subject to new margin requirement
  • May 5, 2026: Effective date for 35% margin requirement on Annexure I securities
  • April 6, 2026: Deadline for company representations regarding framework placement (5:00 PM)

Impact Assessment

The 35% minimum margin requirement is a significant constraint for traders and investors holding positions in affected securities, increasing the cost of carry and potentially forcing position reductions. Securities with high promoter encumbrance are considered elevated-risk from a market surveillance perspective. The measure applies across both cash and derivatives segments, amplifying its reach. The periodic exit mechanism (Annexure II) provides relief for companies that have reduced their encumbrance levels, while new entrants (Annexure I) reflect updated pledging disclosures. Trading members and institutional investors must audit their portfolios against Annexure I and III to ensure adequate margin availability ahead of May 5, 2026.

Impact Justification

Mandates a significant 35% minimum margin requirement on affected securities across both Equity and Equity Derivatives segments, directly impacting trading costs and risk exposure for members holding or creating positions in listed securities with high promoter encumbrance.