Description

NSE announces changes to Enhanced Surveillance Measure including new securities additions, stage transitions, and 100% margin requirements effective September 1, 2025.

Summary

NSE has announced updates to the Enhanced Surveillance Measure (ESM) framework effective August 29 and September 1, 2025. Three new securities will be added to ESM Stage-I with 100% margin requirements, while two securities will move from Stage-I to Stage-II under Trade-for-Trade with 2% price band restrictions.

Key Points

  • Three securities added to ESM Stage-I: Andhra Cements Limited (ACL), Parth Electricals & Engineering Limited (PARTH), and Reliable Data Services Limited (RELIABLE)
  • Two securities moving from Stage-I to Stage-II: Krishival Foods Limited (KRISHIVAL) and Shree Ram Proteins Limited (SRPL)
  • All ESM securities will shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST)
  • Stage-II securities will operate under Periodic Call Auction with 2% price band
  • No securities are being excluded from the ESM framework

Regulatory Changes

  • Enhanced Surveillance Measure framework continues with staged approach
  • Securities in ESM attract minimum 100% margin on all positions
  • Stage-II securities operate under Trade-for-Trade with price band restrictions
  • Framework operates in conjunction with other prevailing surveillance measures

Compliance Requirements

  • Market participants must ensure 100% margin compliance for ESM securities
  • Trading members must adjust systems for segment changes from EQ/SM to BE/ST
  • Stage-II securities require adherence to 2% price band under Periodic Call Auction
  • Members should monitor consolidated ESM list for ongoing compliance

Important Dates

  • August 29, 2025: Stage transitions effective, Stage-II securities under Trade-for-Trade with 2% price band
  • September 1, 2025: New ESM Stage-I securities attract 100% margin, segment shift to BE/ST effective
  • September 1, 2025: All open positions as of August 29 and new positions subject to 100% margin

Impact Assessment

High impact on trading liquidity and capital requirements. The 100% margin requirement significantly increases capital costs for traders in affected securities. Segment shift to Trade-for-Trade reduces liquidity by eliminating intraday squaring off. Stage-II restrictions with 2% price band and Periodic Call Auction further limit trading flexibility. Market participants trading these securities will face increased operational complexity and capital allocation challenges.

Impact Justification

High impact due to 100% margin requirements and segment shifts affecting trading liquidity for multiple securities