Description
BSE moves select securities to higher Graded Surveillance Measure (GSM) stages from May 7, 2026, imposing trade-to-trade settlement, enhanced margins, and additional surveillance deposits on buyers.
Summary
BSE has issued Notice No. 20260506-31 informing trading members that certain securities will be moved to higher stages of the Graded Surveillance Measure (GSM) framework effective May 7, 2026. The specific list of affected securities is provided in the attached Annexure. Affected securities will face progressively stringent surveillance actions depending on their assigned GSM stage (I through IV).
Key Points
- Securities listed in the attached Annexure will move to higher GSM stages effective May 7, 2026
- Settlement for all affected securities will be on a trade-to-trade basis with no netting off allowed
- Trading members are advised to take adequate precautions while trading in these securities
- This circular references the original GSM framework notice dated February 23, 2017 and subsequent amendments
- Queries may be directed to bse.surv@bseindia.com
Regulatory Changes
Securities are being escalated to higher GSM stages as per the existing GSM Framework (originally published February 23, 2017, last amended November 17, 2023). The surveillance actions by stage are:
| Stage | Surveillance Actions |
|---|---|
| Stage I | Applicable margin rate shall be 100%; Price band of 5% or lower as applicable |
| 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); 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); ASD of 100% of trade value to be deposited by buyers; No upward price movement allowed |
Compliance Requirements
- Trading members must note the new GSM stage assignments for all securities listed in the Annexure
- Buyers of Stage II, III, and IV securities must arrange for Additional Surveillance Deposit (ASD) as applicable
- No netting off is permitted — all trades must be settled on a gross, trade-to-trade basis
- Members dealing in Stage III or IV securities must restrict trading to Mondays (or the first trading day of the week)
- Members should review the FAQ available at the BSE website for further guidance
Important Dates
- Circular Date: May 6, 2026
- Effective Date: May 7, 2026 — securities move to their respective higher GSM stages
Impact Assessment
The escalation of securities to higher GSM stages significantly restricts their tradability and liquidity. Stage III and IV securities can only be traded once per week, sharply reducing trading opportunities. The mandatory ASD requirement of up to 100% of trade value for buyers creates substantial capital requirements, likely dampening interest and volume in affected securities. The no-netting rule increases settlement burden for trading members. Retail and institutional investors holding these securities face reduced exit options. These measures are intended to protect investors by flagging potentially manipulated or fundamentally weak securities and discouraging speculative activity.
Impact Justification
Securities moved to GSM stages face severe trading restrictions including trade-to-trade settlement, 100% margins, weekly trading limits, and mandatory additional surveillance deposits, significantly affecting liquidity and tradability.