Description

BSE updates the Enhanced Surveillance Measure (ESM) framework with new securities attracting 100% margin and Trade-for-Trade settlement effective May 12, 2026, along with stage revisions and exits from the framework effective May 11, 2026.

Summary

BSE has updated its Enhanced Surveillance Measure (ESM) framework (Notice No. 20260508-31) with new inclusions, stage revisions, and exits effective May 11–12, 2026. Newly included securities will attract a minimum 100% margin on all open and new positions, be moved from Rolling Settlement to Trade-for-Trade segment, and Stage II securities will trade under a 2% price band with Periodic Call Auction.

Key Points

  • Securities in Annexure I newly included under ESM will attract minimum 100% margin on all open positions as on May 11, 2026, and on new positions from May 12, 2026.
  • Certain securities will be moved to a lower Stage (Stage I) under ESM Framework effective May 11, 2026.
  • All newly qualifying ESM securities will shift from Rolling Settlement to Trade-for-Trade segment effective May 12, 2026.
  • Securities shifting to Stage II will be subject to Trade-for-Trade with a 2% price band and Periodic Call Auction effective May 11, 2026.
  • Securities exiting the ESM Framework are listed in Annexure II, effective May 11, 2026.
  • 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 the Exchanges.
  • Shortlisting under ESM is purely a surveillance action and should not be construed as adverse action against the company.

Regulatory Changes

  • New securities added to the ESM framework per criteria defined in prior notices (ref: 20230602-44, 20230718-46, 20240809-42, 20240920-63, 20241004-65, 20250725-61).
  • Stage downgrades (to Stage I) applied to eligible securities within the ESM framework.
  • Stage II securities now subject to Periodic Call Auction in addition to Trade-for-Trade and 2% price band restrictions.

Compliance Requirements

  • Trading members must ensure 100% margin collection on all open positions in newly included ESM securities as on May 11, 2026, and for all new positions created from May 12, 2026.
  • Members must update systems to reflect settlement type changes (Rolling Settlement → Trade-for-Trade) for affected scrips from May 12, 2026.
  • Members trading Stage II securities must adhere to the 2% price band and Periodic Call Auction mechanism effective May 11, 2026.
  • Price band for securities exiting ESM will revert to the band applicable prior to ESM inclusion, unless the scrip remains under another surveillance framework.
  • For clarifications, members may contact BSE Surveillance at bse.surv@bseindia.com.

Important Dates

  • May 11, 2026: Stage I downgrade effective; Stage II (2% price band + Periodic Call Auction) effective; securities exit ESM framework (Annexure II).
  • May 12, 2026: 100% margin requirement effective on new positions; shift from Rolling Settlement to Trade-for-Trade effective for newly included ESM securities.

Impact Assessment

This circular has high market impact for traders and investors holding positions in affected securities. The 100% margin requirement significantly increases the cost of holding positions, potentially triggering forced liquidations. The shift to Trade-for-Trade settlement eliminates netting benefits and increases settlement obligations. The 2% price band on Stage II securities severely restricts intraday price movement, limiting liquidity. Securities exiting ESM will see eased trading conditions with price bands reverting to pre-ESM levels, which may attract renewed interest. Overall, the circular reinforces BSE’s ongoing surveillance posture on high-risk or unusual-activity scrips.

Impact Justification

Directly impacts trading conditions for multiple securities — imposing 100% margin requirements, shifting settlement from rolling to trade-for-trade, and applying 2% price bands with periodic call auctions for Stage II securities. Affects market participants holding or trading affected scrips.