Description
BSE updates the Enhanced Surveillance Measure (ESM) framework listing securities newly included with 100% margin requirement, securities moving to Stage I, and securities exiting the framework effective May 05-06, 2026.
Summary
BSE has issued an update to the Enhanced Surveillance Measure (ESM) framework (Notice No. 20260504-31). Securities newly satisfying ESM criteria will attract a minimum 100% margin requirement effective May 06, 2026, and will 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 with Periodic Call Auction effective May 05, 2026. Some securities are being moved down to Stage I, and others are being removed from the ESM framework entirely.
Key Points
- Securities included under ESM (Annexure I) will attract minimum 100% margin on all open positions as on May 05, 2026 and new positions from May 06, 2026
- Newly included ESM securities will be shifted from Rolling Settlement to Trade-for-Trade segment w.e.f. May 06, 2026
- Securities moving to Stage II will be subject to Trade-for-Trade with a 2% price band and Periodic Call Auction w.e.f. May 05, 2026
- Certain securities are being moved to lower Stage I under the ESM framework w.e.f. May 05, 2026 (Annexure I)
- Securities exiting the ESM framework w.e.f. May 05, 2026 are listed in Annexure II
- A consolidated list of all securities currently under ESM is provided in Annexure III
- ESM operates in conjunction with all other prevailing surveillance measures imposed by exchanges
- Shortlisting under ESM is purely for market surveillance purposes and should not be construed as adverse action against the concerned company
Regulatory Changes
This notice updates the ESM framework originally established via notice no. 20230602-44 (June 02, 2023) and subsequently amended on July 18, 2023, August 09, 2024, September 20, 2024, October 04, 2024, and July 25, 2025. The current update reflects the periodic review cycle of the ESM framework.
Compliance Requirements
- Trading members must ensure 100% margin is collected on all open and new positions in newly added ESM securities from the effective dates
- Members must note that Stage II ESM securities will only be tradeable in Trade-for-Trade mode with a 2% price band and through Periodic Call Auction
- Members may direct clarification queries to bse.surv@bseindia.com
- Price band for securities exiting the ESM framework will revert to the pre-ESM applicable price band, unless covered by another surveillance measure
Important Dates
| Date | Event |
|---|---|
| May 04, 2026 | Notice issued |
| May 05, 2026 | Stage I downgrade effective; Stage II price band & Periodic Call Auction effective; ESM exits effective |
| May 06, 2026 | 100% margin requirement effective; Rolling Settlement to Trade-for-Trade shift effective for new inclusions |
Impact Assessment
This is a high-impact regulatory action for securities placed under ESM. The 100% margin requirement significantly increases the cost of holding or acquiring affected securities, which typically leads to sharp reductions in trading volumes and liquidity. The shift to Trade-for-Trade eliminates the benefit of netting positions, further constraining speculative activity. Securities entering Stage II face an additional liquidity constraint through the 2% price band and Periodic Call Auction mechanism. Market participants with exposure to securities in the attached annexures must review and adjust margin provisioning immediately. The specific securities affected are listed in the attached Annexures I, II, and III of the notice.
Impact Justification
Directly imposes 100% margin requirements and forces segment shifts from Rolling Settlement to Trade-for-Trade for affected securities, with price band restrictions for Stage II securities — significant operational and liquidity impact on listed stocks in the ESM list.