Description
BSE notifies trading members that certain securities will be moved to higher GSM stages from May 12, 2026, attracting enhanced surveillance actions including trade-to-trade settlement, price band restrictions, and Additional Surveillance Deposit requirements.
Summary
BSE has notified trading members that securities listed in the attached Annexure will be moved to their respective higher stages of the Graded Surveillance Measure (GSM) framework effective May 12, 2026. The move triggers progressively stricter surveillance actions depending on the GSM stage, ranging from enhanced margins to restricted weekly trading with no upward price movement.
Key Points
- Securities in the Annexure will be elevated to higher GSM stages from May 12, 2026
- Settlement for affected securities will be on a trade-to-trade basis with no netting off allowed
- Four GSM stages apply, each with progressively stricter trading restrictions
- Buyers in Stages II, III, and IV must deposit Additional Surveillance Deposit (ASD)
- Trading members must exercise adequate precautions when trading in these securities
- Queries can be directed to bse.surv@bseindia.com or the GSM FAQ page
Regulatory Changes
The GSM framework was originally established via Exchange Notice No. 20170223-44 (February 23, 2017) and subsequently updated through notices dated March 3, 2017; July 20, 2018; November 29, 2019; and November 17, 2023. This notice implements stage escalations under that existing framework.
GSM Stage Details:
| Stage | Surveillance Actions |
|---|---|
| I | 100% applicable margin rate; price band of 5% or lower |
| II | Trade-to-trade; 5% or lower price band; ASD of 50% of trade value deposited by buyers |
| III | Trade-to-trade; 5% or lower price band; trading permitted once a week (every Monday/1st trading day); ASD of 100% of trade value by buyers |
| IV | Trade-to-trade; 5% or lower price band; trading permitted once a week (every Monday/1st trading day); ASD of 100% of trade value by buyers; no upward price movement |
Compliance Requirements
- Trading Members: Must note and communicate the GSM stage escalation for affected securities to clients; exercise adequate precautions while trading
- Buyers (Stages II–IV): Required to deposit Additional Surveillance Deposit (ASD) — 50% of trade value for Stage II, 100% for Stages III and IV
- Settlement: All trades in affected securities must be settled on a trade-to-trade basis; netting off is not permitted
- Stage IV Securities: No upward price movement is allowed
Important Dates
- May 11, 2026: Notice issued
- May 12, 2026: GSM stage escalations take effect for all securities listed in the Annexure
Impact Assessment
Securities moved to higher GSM stages face significantly reduced liquidity and increased trading costs. Stage III and IV securities are restricted to once-a-week trading (Mondays or first trading day of the week), severely limiting trading activity. The mandatory ASD requirement for buyers increases the capital required to trade these securities. Stage IV securities face the most restrictive conditions, with no upward price movement permitted, effectively capping potential gains. Market participants holding or intending to trade these securities should review the attached Annexure and adjust their strategies accordingly. The trade-to-trade settlement requirement eliminates intraday netting, increasing settlement obligations for all participants.
Impact Justification
Affects a specific list of securities moving to higher GSM stages with tighter trading restrictions, but impact is limited to those securities listed in the attached annexure rather than broad market-wide changes.