Description
BSE notifies trading members that certain securities will be moved to higher GSM stages effective May 19, 2026, attracting enhanced surveillance actions including trade-to-trade settlement, margin requirements up to 100%, and Additional Surveillance Deposits.
Summary
BSE has issued Notice No. 20260518-30 informing trading members that certain securities (listed in the attached Annexure) will be moved to their respective higher stages of the Graded Surveillance Measure (GSM) framework effective May 19, 2026. The GSM framework imposes escalating surveillance restrictions on securities based on their stage, ranging from enhanced margin requirements at Stage I to severely restricted weekly trading with no upward price movement at Stage IV.
Key Points
- Securities listed in the Annexure will move to higher GSM stages effective May 19, 2026
- All affected securities will be subject to trade-to-trade settlement with no netting off allowed
- Price bands of 5% or lower will apply across all GSM stages
- Additional Surveillance Deposit (ASD) requirements apply from Stage II onwards, payable by buyers
- Stage III and IV restrict trading to once a week (every Monday or first trading day of the week)
- Stage IV additionally prohibits upward price movement
- Trading members are advised to take adequate precautions while trading in affected securities
- In case of clarifications, members can refer to GSM FAQs or write to bse.surv@bseindia.com
Regulatory Changes
This notice is issued with reference to the following earlier Exchange notices establishing the GSM framework:
- Notice No. 20170223-44 dated February 23, 2017 (GSM framework introduction)
- 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
The four GSM stages carry the following surveillance actions:
| Stage | Surveillance Actions |
|---|---|
| I | 100% applicable margin rate; price band of 5% or lower |
| II | Trade-to-trade; price band of 5% or lower; ASD of 50% of trade value deposited by buyers |
| III | Trade-to-trade; price band of 5% or lower; trading once a week (Monday/1st trading day); ASD of 100% of trade value by buyers |
| IV | Trade-to-trade; price band of 5% or lower; trading once a week (Monday/1st trading day); ASD of 100% of trade value by buyers; no upward movement |
Compliance Requirements
- Trading Members: Must note the GSM stage movements and apply appropriate margin and ASD requirements when executing trades in affected securities
- Buyers: Must deposit Additional Surveillance Deposits (ASD) as applicable — 50% of trade value at Stage II, 100% of trade value at Stages III and IV
- Settlement: All trades in affected securities must be settled on a trade-to-trade basis; no netting off is permitted
- Due Diligence: Trading members are specifically requested to take adequate precautions while trading in affected securities
Important Dates
- Notice Date: May 18, 2026
- Effective Date: May 19, 2026 — securities move to their respective higher GSM stages
- Trading Day Restriction (Stages III & IV): Every Monday or the first trading day of the week
Impact Assessment
The movement of securities to higher GSM stages has significant market impact:
- Liquidity Reduction: Trade-to-trade settlement and weekly trading restrictions (Stages III & IV) severely curtail liquidity in affected securities
- Cost Increase: ASD requirements of 50%–100% of trade value substantially increase the cost of taking buy positions, discouraging speculative activity
- Price Discovery: 5% price band limits daily price movement, potentially trapping investors in illiquid positions
- Investor Risk: Securities under GSM are flagged as potentially high-risk; investors should exercise extreme caution
- Stage IV Restriction: The prohibition on upward price movement at Stage IV effectively makes these securities one-directional (only downward movement possible), which can accelerate value erosion
- The full list of affected securities is available in the Annexure attached to the original BSE notice (Annexure_GSM)
Impact Justification
Securities moved to higher GSM stages face severe trading restrictions including 100% margins, trade-to-trade settlement, weekly trading limits, and mandatory Additional Surveillance Deposits, significantly impacting liquidity and trading activity in affected securities.