Description

NSE updates Enhanced Surveillance Measure affecting multiple securities with stage transitions, margin requirements, and trading restrictions effective August 25-26, 2025.

Summary

NSE implements Enhanced Surveillance Measure (ESM) changes affecting multiple securities with stage transitions, 100% margin requirements, and trading segment shifts. New securities enter ESM Stage I, while existing securities move between stages with varying restrictions effective August 25-26, 2025.

Key Points

  • Securities in ESM Stage I face 100% margin requirements on all positions
  • Securities shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST)
  • Stage II securities move to Trade-for-Trade with 2% price band under Periodic Call Auction
  • ESM framework operates alongside other existing surveillance measures
  • Shortlisting is purely for market surveillance, not adverse action against companies

Regulatory Changes

  • New ESM Stage I Securities: ABHAPOWER (Abha Power and Steel Limited) and SADBHIN (Sadbhav Infrastructure Project Limited)
  • Stage I to Stage II Movement: PPAP (PPAP Automotive Limited) and VOLERCAR (Voler Car Limited)
  • Stage II to Stage I Movement: ABMINTLLTD (ABM International Limited), ASPIRE (Aspire & Innovative Advertising Limited), DHARMAJ (Dharmaj Crop Guard Limited), and DHRUV (Dhruv Consultancy Services Limited)
  • Price bands for securities exiting framework will revert to pre-ESM levels unless under other surveillance measures

Compliance Requirements

  • Market participants must maintain minimum 100% margin for all ESM Stage I securities
  • Trading in affected securities restricted to Trade-for-Trade segment
  • Stage II securities subject to 2% price band limitation under Periodic Call Auction mechanism
  • Members must comply with enhanced monitoring and reporting requirements

Important Dates

  • August 25, 2025: Stage II securities move to Trade-for-Trade with 2% price band under Periodic Call Auction
  • August 26, 2025: 100% margin requirement effective on all open and new positions for Stage I securities
  • August 26, 2025: Securities shift from EQ/SM to BE/ST segment

Impact Assessment

  • Trading Impact: Significant liquidity constraints due to Trade-for-Trade requirements and price band restrictions
  • Capital Impact: 100% margin requirement substantially increases capital requirements for market participants
  • Market Access: Reduced accessibility for retail investors due to enhanced trading restrictions
  • Price Discovery: Limited price movement potential with 2% price band for Stage II securities
  • Operational Impact: Enhanced monitoring and compliance burden on brokers and market participants

Impact Justification

Significant trading restrictions and 100% margin requirements affecting multiple securities with immediate implementation