Description

BSE implements minimum 35% margin requirement for securities with high promoter encumbrance under SEBI SAST Regulation 28(3), effective May 6, 2026, with select securities eligible for exit from May 4, 2026.

Summary

BSE has issued a notice (No. 20260430-35) continuing its surveillance framework for companies with high promoter encumbrance under Regulation 28(3) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. New securities meeting the inclusion criteria will attract a minimum 35% margin in Equity and Equity Derivatives segments from May 6, 2026, while certain securities are eligible to exit the framework from May 4, 2026.

Key Points

  • Securities in Annexure I will attract a minimum 35% margin in Equity and Equity Derivatives segments effective May 6, 2026, applicable to all open positions as on May 5, 2026 and new positions created from May 6, 2026
  • Securities in Annexure II are eligible to move out of the surveillance framework effective May 4, 2026
  • Annexure III provides a consolidated list of all securities currently under the framework
  • This surveillance measure operates in conjunction with all other prevailing surveillance measures imposed by the Exchange
  • The framework is subject to periodic review
  • Shortlisting under this measure is purely for market surveillance purposes and should not be construed as adverse action against any company or entity

Regulatory Changes

This notice is a continuation of earlier Exchange notices 20191024-30 (October 24, 2019) and 20200417-31 (April 17, 2020) on the same subject. No new regulatory framework is introduced; this is a periodic update to the list of securities under the existing high-encumbrance surveillance measure aligned with SEBI SAST Regulation 28(3).

Compliance Requirements

  • Trading Members must apply the minimum 35% margin on Annexure I securities in both Equity and Equity Derivatives segments from May 6, 2026
  • The margin applies to all open positions as of May 5, 2026 and all new positions from May 6, 2026 onwards
  • Companies seeking representation against their inclusion in the framework must submit it to BSE by 5:00 PM on May 4, 2026
  • Queries or clarifications should be directed to bse.surv@bseindia.com

Important Dates

  • April 30, 2026: Notice date
  • May 4, 2026 by 5:00 PM: Deadline for companies to submit representation against inclusion in the framework
  • May 4, 2026: Effective date for exit of Annexure II securities from the framework
  • May 5, 2026: Reference date for existing open positions subject to 35% margin
  • May 6, 2026: Effective date for 35% margin applicability for Annexure I securities

Impact Assessment

Trading members face an immediate operational requirement to apply enhanced 35% margin on newly included securities across both the equity cash and derivatives segments. This increases the cost of holding or creating positions in affected stocks, potentially reducing liquidity and increasing volatility for those securities. Companies with high promoter encumbrance (pledging) as reported under SAST Regulation 28(3) are at risk of inclusion, which may negatively affect investor sentiment even though BSE clarifies the measure is not an adverse regulatory action. The consolidated Annexure III list allows market participants to monitor the full scope of the framework.

Impact Justification

Imposes mandatory 35% margin requirement on affected securities in both equity and equity derivatives segments, with immediate operational deadlines for trading members and companies seeking representation.