Description

NSE updates Enhanced Surveillance Measure framework with new securities additions, stage transitions, and trade-for-trade segment shifts effective July 30-31, 2025.

Summary

NSE has updated its Enhanced Surveillance Measure (ESM) framework, adding new securities and transitioning others between stages. The changes include minimum 100% margin requirements, shifts from rolling settlement to trade-for-trade segments, and implementation of periodic call auction with 2% price bands for Stage II securities.

Key Points

  • United Polyfab Gujarat Limited (UNITEDPOLY) added to ESM Stage I with 100% margin requirement
  • GP Eco Solutions India Limited (GPECO) moved from Stage I to Stage II
  • Securities in ESM will shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST)
  • Stage II securities will have 2% price band under Periodic Call Auction
  • No securities excluded from ESM framework in this update
  • ESM framework operates in conjunction with other surveillance measures

Regulatory Changes

  • Enhanced margin requirements of minimum 100% for ESM securities
  • Segment classification changes from EQ/SM to BE/ST for affected securities
  • Implementation of Periodic Call Auction mechanism for Stage II securities
  • Price band restriction of 2% for Stage II securities

Compliance Requirements

  • Market participants must ensure compliance with 100% margin requirements for ESM securities
  • Trading members must adapt to trade-for-trade segment operations for affected securities
  • Participants should monitor the consolidated ESM list for ongoing compliance
  • Regular review of surveillance measures and framework updates required

Important Dates

  • July 30, 2025: ESM Stage transitions and exclusions effective
  • July 30, 2025: Stage II securities move to Periodic Call Auction with 2% price band
  • July 31, 2025: 100% margin requirement effective on all open and new positions
  • July 31, 2025: Securities shift from Rolling Settlement to Trade-for-Trade segment

Impact Assessment

Trading Impact: Securities under ESM will experience reduced liquidity due to trade-for-trade mechanism and higher margin requirements. The 2% price band for Stage II securities will limit price volatility but may affect price discovery.

Market Participants: Increased capital requirements due to 100% margin and operational adjustments needed for trade-for-trade settlement. Enhanced monitoring and compliance procedures required.

Investor Impact: Limited trading flexibility and potentially higher transaction costs for affected securities. Investors should review positions in ESM securities before implementation dates.

Impact Justification

Affects specific securities with enhanced surveillance measures including margin increases and trading segment changes