Description

NSE announces inclusion of securities under Enhanced Surveillance Measure (ESM) framework with 100% margin requirements and trade-for-trade restrictions effective October 14, 2025.

Summary

NSE has issued updates to the Enhanced Surveillance Measure (ESM) framework, announcing securities being added to Stage I, securities moving between stages, and securities eligible to exit the framework. Two securities (MAHASTEEL and VISASTEEL) will be newly included under ESM Stage I with 100% margin requirements and will shift from rolling settlement to trade-for-trade segment effective October 14, 2025. Additionally, six securities are moving from Stage II back to Stage I, indicating improved market behavior.

Key Points

  • Two securities (Mahamaya Steel Industries Limited and Visa Steel Limited) newly included in ESM Stage I effective October 14, 2025
  • Minimum 100% margin required on all open positions as on October 13, 2025 and new positions from October 14, 2025
  • Securities shifting from Rolling Settlement segment (EQ/SM) to Trade-for-Trade segment (BE/ST) w.e.f. October 14, 2025
  • Securities moving to Stage II will be under Trade-for-Trade with 2% price band under Periodic Call Auction from October 13, 2025
  • Six securities moving from Stage II to Stage I: A2Z Infra Engineering, Andhra Cements, Dharan Infra-EPC, Excel Realty N Infra, Indiabulls Enterprises, and Sadhana Nitrochem
  • No securities shortlisted to move from Stage I to Stage II in this update
  • ESM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting under ESM is purely for market surveillance and not an adverse action against the company

Regulatory Changes

The circular implements changes under the Enhanced Surveillance Measure (ESM) framework, which was established through previous circulars dating back to June 2023. The framework includes:

  • Mandatory 100% margin requirements for securities under ESM Stage I
  • Shift from normal rolling settlement to trade-for-trade settlement mode
  • Stage II securities subject to 2% price band under Periodic Call Auction mechanism
  • Price band reinstatement to pre-ESM levels when securities exit the framework (unless subject to other surveillance measures)

Compliance Requirements

  • Market participants must ensure 100% margin is maintained on all open positions in the affected securities as on October 13, 2025
  • 100% margin must be maintained on all new positions created from October 14, 2025 onwards
  • Trading members must adjust their trading systems to accommodate the shift from EQ/SM series to BE/ST series for the two newly included securities
  • Members should refer to Annexures I, II, and III for complete lists of securities affected
  • For queries, members should contact surveillance@nse.co.in

Important Dates

  • October 10, 2025: Circular issue date
  • October 13, 2025: 100% margin applicable on all open positions; Stage II securities move to Trade-for-Trade with 2% price band under Periodic Call Auction
  • October 14, 2025: 100% margin applicable on new positions; securities shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST)

Impact Assessment

Market Impact: The inclusion of two securities in ESM Stage I will significantly reduce liquidity in these counters as they move to trade-for-trade settlement, eliminating intraday trading opportunities. The 100% margin requirement will substantially increase capital requirements for traders holding positions in these securities.

Positive Development: Six securities moving from Stage II back to Stage I represents an improvement in their market surveillance parameters, allowing for slightly relaxed restrictions though they remain under enhanced surveillance.

Operational Impact: Brokers and trading members will need to adjust margin collection processes and update client communications regarding the affected securities. The shift to BE/ST series requires system updates and potential reconfiguration of trading terminals.

Investor Impact: Retail and institutional investors holding these securities should be aware of reduced liquidity and increased margin requirements, which may affect their ability to enter or exit positions efficiently.

Impact Justification

Significant trading restrictions with 100% margin requirements and shift to trade-for-trade segment affecting multiple securities, directly impacting liquidity and trading operations.