Description

BSE notifies trading members that certain securities will be moved to higher GSM stages effective May 06, 2026, attracting enhanced surveillance actions including trade-for-trade settlement, price bands, and Additional Surveillance Deposits.

Summary

BSE has notified trading members that certain securities (listed in the attached Annexure) will be moved to higher stages of the Graded Surveillance Measure (GSM) framework effective May 06, 2026. The GSM framework, originally published on February 23, 2017, imposes progressively stringent surveillance actions depending on the stage assigned to a security.

Key Points

  • Securities listed in the Annexure will move to their respective higher GSM stages from May 06, 2026.
  • GSM stages range from I to IV, each carrying escalating surveillance restrictions.
  • Stage I imposes a 100% margin rate and a price band of 5% or lower.
  • Stage II adds trade-for-trade settlement and an Additional Surveillance Deposit (ASD) of 50% of trade value payable by buyers.
  • Stage III restricts trading to once a week (every Monday or first trading day) with ASD of 100% of trade value.
  • Stage IV is the most restrictive, similar to Stage III but with no upward price movement allowed.
  • No netting off is permitted; settlement will be done on a trade-to-trade basis.
  • Members are advised to take adequate precautions while trading in these securities.

Regulatory Changes

This notice is issued with reference to the following prior exchange notices that established and updated the GSM framework:

  • Notice no. 20170223-44 dated February 23, 2017
  • Notice no. 20170303-29 dated March 03, 2017
  • Notice no. 20180720-55 dated July 20, 2018
  • Notice no. 20191129-23 dated November 29, 2019
  • Notice no. 20231117-63 dated November 17, 2023

No new regulatory framework is introduced; this circular applies the existing GSM framework to a new set of securities.

Compliance Requirements

  • Trading Members must note the updated GSM stage assignments for all securities listed in the Annexure.
  • Buyers in Stage II securities must deposit ASD of 50% of trade value.
  • Buyers in Stage III and IV securities must deposit ASD of 100% of trade value.
  • All trades in affected securities must be settled on a trade-to-trade basis with no netting off.
  • Members must ensure trades in Stage III and IV securities occur only on Mondays (or the first trading day of the week).
  • For clarifications, members may refer to the BSE FAQ on GSM or contact bse.surv@bseindia.com.

Important Dates

  • May 06, 2026: Effective date for securities moving to their respective higher GSM stages.

Impact Assessment

Securities moved into higher GSM stages will face significantly reduced liquidity due to trade-for-trade settlement, tighter price bands (5% or lower), and large mandatory deposit requirements for buyers. Stage IV securities are particularly illiquid as they can only be traded once a week with no upward price movement. Retail and institutional investors holding these securities may face challenges in exiting positions. Trading members must update their risk management systems to reflect the new margin and ASD requirements for the affected securities.

Impact Justification

Securities moved to higher GSM stages face severe trading restrictions including trade-for-trade settlement, 5% price bands, weekly trading limits, and mandatory ASD of up to 100% of trade value, significantly impacting liquidity and investor activity in affected scrips.