Description

NSE announces securities moving into ESM Stage I and Stage II, with increased margin requirements and trade-for-trade segment shift effective October 17, 2025.

Summary

NSE has issued surveillance circular imposing Enhanced Surveillance Measure (ESM) on select securities effective October 16-17, 2025. Three securities (MANAV, TECHERA, WEWIN) are being added to ESM Stage I, while DRSCARGO moves from Stage I to Stage II. Securities under ESM will attract minimum 100% margin on all positions and will be shifted from Rolling Settlement (EQ/SM series) to Trade-for-Trade segment (BE/ST series). Stage II securities will additionally be placed under Periodic Call Auction with 2% price band.

Key Points

  • Three new securities included in ESM Stage I: Manav Infra Projects Limited, TechEra Engineering (India) Limited, and WE WIN LIMITED
  • DRS Cargo Movers Limited moves from ESM Stage I to Stage II
  • Minimum 100% margin applicable on all open positions as on October 16, 2025 and new positions from October 17, 2025
  • Securities shifting from Rolling Settlement segment (Series: EQ/SM) to Trade-for-Trade segment (Series: BE/ST) effective October 17, 2025
  • Stage II securities will be under Trade-for-Trade with 2% price band under Periodic Call Auction from October 16, 2025
  • No securities excluded from ESM framework in this update
  • ESM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting is purely for market surveillance and not adverse action against companies

Regulatory Changes

The circular implements stringent trading restrictions under the Enhanced Surveillance Measure framework. Securities identified under ESM criteria will be subject to:

  1. Margin Requirements: Minimum 100% margin on all positions (both existing and new)
  2. Segment Change: Mandatory shift from Rolling Settlement to Trade-for-Trade segment
  3. Stage-based Restrictions: Stage II securities face additional constraints including Periodic Call Auction mechanism with restricted 2% price band

This circular references previous ESM framework circulars: NSE/SURV/56948 (June 02, 2023), NSE/SURV/57609 (July 18, 2023), NSE/SURV/63361 (August 09, 2024), NSE/SURV/64066 (September 20, 2024), NSE/SURV/64400 (October 04, 2024), and NSE/SURV/69315 (July 25, 2025).

Compliance Requirements

For NSE Trading Members:

  • Ensure collection of minimum 100% margin from clients on affected securities
  • Apply margin requirements to all open positions as on October 16, 2025
  • Apply margin requirements to all new positions created from October 17, 2025
  • Update trading systems to reflect segment changes (EQ/SM to BE/ST series)
  • Implement price band restrictions for Stage II securities
  • Comply with Trade-for-Trade settlement requirements

For Investors/Traders:

  • Maintain adequate margins (100% minimum) for positions in ESM securities
  • Be aware of reduced liquidity due to Trade-for-Trade mechanism (no intraday squaring off)
  • Account for 2% price band restrictions for Stage II securities in Periodic Call Auction

Important Dates

  • October 15, 2025: Circular issuance date
  • October 16, 2025:
    • ESM Stage changes become effective
    • 100% margin applicable on all open positions
    • Stage II securities move to Periodic Call Auction with 2% price band
  • October 17, 2025:
    • New positions attract 100% margin requirement
    • Securities shift from EQ/SM series to BE/ST series (Trade-for-Trade segment)

Impact Assessment

Market Impact:

  • Significantly reduced liquidity in affected securities due to Trade-for-Trade mechanism
  • Price discovery constraints from 2% price band for Stage II securities
  • Limited intraday trading opportunities as positions cannot be squared off intraday
  • Potential increase in volatility upon implementation due to forced position adjustments

Operational Impact:

  • Higher capital requirements for traders holding positions in ESM securities (100% margin vs typical 20-40%)
  • Increased settlement obligations as all trades require delivery
  • Enhanced monitoring requirements for brokers and risk management systems
  • Potential portfolio rebalancing by institutional investors avoiding high-margin securities

Affected Securities Details:

ESM Stage I (New Additions):

  1. Manav Infra Projects Limited (MANAV) - ISIN: INE104Y01012
  2. TechEra Engineering (India) Limited (TECHERA) - ISIN: INE0JQS01019
  3. WE WIN LIMITED (WEWIN) - ISIN: INE082W01014

ESM Stage II (Upgraded from Stage I):

  1. DRS Cargo Movers Limited (DRSCARGO) - ISIN: INE0QZM01018

The surveillance measure aims to curb excessive speculation and ensure orderly price discovery in securities exhibiting unusual trading patterns. Market participants should exercise caution and adjust trading strategies accordingly.

Impact Justification

Significant trading restrictions with 100% margin requirement and shift to trade-for-trade segment for affected securities, limiting liquidity and increasing capital requirements for traders