Description
BSE notifies trading members that certain securities will be moved to higher GSM stages effective May 18, 2026, attracting enhanced surveillance actions including trade-for-trade settlement, price bands, and Additional Surveillance Deposits.
Summary
BSE has issued a notice moving certain securities to higher stages of the Graded Surveillance Measure (GSM) framework with effect from May 18, 2026. The affected securities are listed in the attached Annexure and will be subject to progressively stringent surveillance actions depending on their assigned GSM stage (I through IV). Trading members are advised to exercise adequate caution when dealing in these securities.
Key Points
- Securities will be moved to their respective higher GSM stages effective May 18, 2026
- Affected securities are listed in the attached Annexure (Annexure_GSM)
- Four GSM stages apply, each with increasingly restrictive trading conditions
- Settlement will be on a trade-to-trade basis with no netting off allowed
- Buyers in higher stages must deposit Additional Surveillance Deposits (ASD)
- Members may contact bse.surv@bseindia.com for clarifications
Regulatory Changes
The GSM framework, originally published on February 23, 2017 and subsequently amended (notices dated March 3, 2017; July 20, 2018; November 29, 2019; and November 17, 2023), governs the surveillance actions applied to securities at each stage:
| Stage | Surveillance Actions |
|---|---|
| I | Applicable margin rate of 100% AND price band of 5% or lower |
| II | Trade-for-trade with 5% or lower price band AND ASD of 50% of trade value deposited by buyers |
| III | Trade-for-trade with 5% or lower price band AND trading permitted once a week (every Monday/1st trading day) AND ASD of 100% of trade value deposited by buyers |
| IV | Trade-for-trade with 5% or lower price band AND trading permitted once a week (every Monday/1st trading day) AND ASD of 100% of trade value deposited by buyers with no upward price movement |
Compliance Requirements
- Trading Members: Must note the securities listed in the Annexure and apply appropriate surveillance measures from May 18, 2026
- Buyers: Must deposit the applicable Additional Surveillance Deposit (ASD) — 50% of trade value at Stage II; 100% of trade value at Stages III and IV
- Settlement: All transactions in affected securities must be settled on a trade-to-trade basis; no netting off is permitted
- Members are advised to take adequate precautions while trading in the notified securities
- For FAQs on GSM, refer to: http://www.bseindia.com/markets/equity/EQReports/graded_surveil_measure.aspx?expandable=6
Important Dates
- Notice Date: May 15, 2026
- Effective Date: May 18, 2026 (securities moved to respective higher GSM stages)
Impact Assessment
The escalation of securities to higher GSM stages will have a significant impact on market participants:
- Liquidity Reduction: Trade-for-trade settlement and weekly trading restrictions (Stages III & IV) will substantially reduce liquidity in affected securities
- Increased Costs: Mandatory ASD requirements (50%–100% of trade value) increase the capital burden on buyers, discouraging speculative activity
- Price Constraints: A 5% or lower price band limits daily price movement, and Stage IV securities face an absolute restriction on upward movement
- Investor Caution: The GSM framework is designed to protect investors from abnormal price movements in securities exhibiting unusual trading patterns or fundamentals mismatches
- Operational Impact: Brokers and trading members must update systems and client communication to reflect the new restrictions on affected securities from May 18, 2026
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 Additional Surveillance Deposits of up to 100% of trade value, significantly impacting liquidity and investor participation.