Description

BSE notifies trading members that certain securities will be moved to higher GSM stages effective May 20, 2026, attracting enhanced surveillance actions including trade-to-trade settlement, price bands of 5% or lower, and Additional Surveillance Deposits.

Summary

BSE has issued Notice No. 20260519-25 informing trading members that certain securities (listed in an attached Annexure) will be moved to higher stages of the Graded Surveillance Measure (GSM) framework effective May 20, 2026. The GSM framework, originally published on February 23, 2017, imposes progressively stricter surveillance actions on securities at higher stages.

Key Points

  • Securities listed in the attached Annexure will move to their respective higher GSM stages from May 20, 2026
  • Four GSM stages exist, each with progressively more restrictive trading conditions
  • All stages from II onwards require trade-to-trade settlement with no netting off allowed
  • Trading members must take adequate precautions while trading in these securities
  • Settlement will be done strictly on a trade-to-trade basis

Regulatory Changes

The circular references the GSM framework established under 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. Securities are being escalated to higher surveillance stages within this existing framework.

Compliance Requirements

Stage I: Applicable margin rate of 100% and price band of 5% or lower.

Stage II: Trade-to-trade settlement 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 settlement with price band of 5% or lower; trading permitted once a week (every Monday or 1st trading day of the week); ASD of 100% of trade value to be deposited by buyers.

Stage IV: Trade-to-trade settlement with price band of 5% or lower; trading permitted once a week (every Monday or 1st trading day of the week); ASD of 100% of trade value to be deposited by buyers; no upward price movement allowed.

Trading members must:

  • Note the securities listed in the Annexure and their assigned GSM stages
  • Ensure compliance with applicable margin, ASD, and price band requirements
  • Ensure no netting off in settlement for affected securities
  • Refer to the BSE FAQ on GSM for clarifications or contact bse.surv@bseindia.com

Important Dates

  • May 19, 2026: Notice issued
  • May 20, 2026: Effective date — securities moved to higher GSM stages

Impact Assessment

Securities moved to higher GSM stages face significantly reduced liquidity and increased trading costs. Buyers in Stage II–IV securities must deposit Additional Surveillance Deposits of 50–100% of trade value, making speculative or leveraged trading extremely costly. Stage III and IV securities are further restricted to weekly trading only, severely limiting price discovery and exit opportunities for investors. The no-upward-movement restriction at Stage IV effectively caps price appreciation, making these among the most restrictive conditions on the exchange. Traders and investors holding or considering positions in the affected securities should review the Annexure and reassess their risk exposure accordingly.

Impact Justification

Securities moved to higher GSM stages face severe trading restrictions including trade-to-trade settlement, 5% price bands, weekly trading limits, and mandatory Additional Surveillance Deposits of up to 100% of trade value, significantly affecting liquidity and trading activity.