Description
BSE notifies trading members that certain securities will be moved to higher GSM stages effective May 4, 2026, attracting enhanced surveillance actions including trade-to-trade settlement, price bands of 5% or lower, and Additional Surveillance Deposits.
Summary
BSE has issued Notice No. 20260430-41 informing trading members that specific securities (listed in an attached Annexure) will be moved to higher stages of the Graded Surveillance Measure (GSM) framework effective May 4, 2026. Securities under GSM face progressively stricter trading restrictions based on their assigned stage (I through IV), including trade-to-trade settlement, reduced price bands, and mandatory Additional Surveillance Deposits (ASD).
Key Points
- Securities will move to higher GSM stages effective May 4, 2026
- The GSM framework applies four progressive stages of surveillance actions
- Settlement for all affected securities will be done on a trade-to-trade basis with no netting off allowed
- Trading members must take adequate precautions while trading in the listed securities
- The affected securities are listed in the Annexure attached to the notice (Annexure_GSM)
- Clarifications can be sought via FAQ or by emailing bse.surv@bseindia.com
Regulatory Changes
The notice is issued with reference to several prior exchange notices establishing the GSM framework:
- Exchange notice no. 20170223-44 dated February 23, 2017
- Exchange notice no. 20170303-29 dated March 03, 2017
- Exchange notice no. 20180720-55 dated July 20, 2018
- Exchange notice no. 20191129-23 dated November 29, 2019
- Exchange notice no. 20231117-63 dated November 17, 2023
No new regulatory framework changes are introduced; this notice applies existing GSM provisions to a new set of securities.
Compliance Requirements
Trading members must adhere to the following surveillance actions based on GSM stage:
| Stage | Surveillance Actions |
|---|---|
| Stage I | Applicable margin rate of 100%; price band of 5% or lower |
| Stage II | Trade-to-trade with price band of 5% or lower; Additional Surveillance Deposit (ASD) of 50% of trade value to be deposited by buyers |
| Stage III | Trade-to-trade with price band of 5% or lower; trading permitted once a week (every Monday / 1st trading day of the week); ASD of 100% of trade value to be deposited by buyers |
| Stage IV | Trade-to-trade with price band of 5% or lower; trading permitted once a week (every Monday / 1st trading day of the week); ASD of 100% of trade value to be deposited by buyers; no upward movement allowed |
- No netting off is permitted; all settlement must be trade-to-trade
- Buyers are responsible for depositing the ASD for Stage II, III, and IV securities
Important Dates
- Notice Date: April 30, 2026
- Effective Date: May 4, 2026 (securities moved to higher GSM stages)
Impact Assessment
Securities placed under higher GSM stages face significantly reduced liquidity and increased trading costs:
- Stage III and IV securities are restricted to trading only once a week (Mondays), severely limiting exit options for investors
- Stage IV securities face an additional restriction of no upward price movement, effectively capping gains
- The mandatory ASD requirement (up to 100% of trade value) increases capital requirements for buyers substantially
- Trade-to-trade settlement eliminates the benefit of intraday netting, increasing margin obligations
- These measures are designed to protect retail investors from potentially manipulated or fundamentally weak stocks
- Trading members and their clients holding or intending to trade these securities should reassess positions given the enhanced restrictions
Impact Justification
Securities moved to higher GSM stages face severe trading restrictions including trade-to-trade settlement, 5% price bands, weekly trading limits, and mandatory Additional Surveillance Deposits up to 100% of trade value, significantly impacting liquidity and market participation.