Description

NSE announces addition of 4 securities to ESM Stage-I and movement of 2 securities from Stage-I to Stage-II with increased margin requirements and trading restrictions effective October 24-27, 2025.

Summary

NSE has issued updates to the Enhanced Surveillance Measure (ESM) framework, adding 4 securities to ESM Stage-I and moving 2 securities from Stage-I to Stage-II. The affected securities will face a minimum 100% margin requirement and will be shifted from Rolling Settlement segment to Trade-for-Trade segment. Securities moving to Stage-II will additionally be placed under Periodic Call Auction with a 2% price band.

Key Points

  • 4 securities added to ESM Stage-I: Mayasheel Ventures Limited, Sharp Chucks and Machines Limited, Sejal Glass Limited, and Xelpmoc Design And Tech Limited
  • 2 securities moved from ESM Stage-I to Stage-II: Mcleod Russel India Limited and S.A.L. Steel Limited
  • No securities excluded from ESM framework
  • No securities moved from Stage-II to Stage-I
  • 100% margin requirement applies on all open positions and new positions
  • Securities will shift from EQ/SM series to BE/ST series (Trade-for-Trade)
  • Stage-II securities will be under Periodic Call Auction with 2% price band
  • ESM framework operates in conjunction with other surveillance measures

Regulatory Changes

Securities qualifying under ESM Stage-I will be shifted from Rolling Settlement segment (Series: EQ/SM) to Trade-for-Trade segment (Series: BE/ST). Stage-II securities will additionally face restrictions under Periodic Call Auction mechanism with a 2% price band limitation.

Compliance Requirements

  • Market participants must ensure compliance with 100% margin requirement for affected securities
  • Margins apply to both existing open positions as on October 24, 2025, and new positions created from October 27, 2025
  • Trading members must adapt to Trade-for-Trade settlement mechanism for listed securities
  • For Stage-II securities, trading will be restricted to Periodic Call Auction sessions only

Important Dates

  • October 23, 2025: Circular issued
  • October 24, 2025: Stage-II securities come under Trade-for-Trade with 2% price band under Periodic Call Auction; 100% margin applies on open positions
  • October 27, 2025: Stage-I securities shift from EQ/SM to BE/ST series; 100% margin applies on new positions

Impact Assessment

High Impact: The imposition of 100% margin requirements significantly reduces leverage availability for traders in these securities. The shift to Trade-for-Trade segment eliminates intraday trading opportunities and requires full upfront capital for transactions. For Stage-II securities (MCLEODRUSS and SALSTEEL), the additional Periodic Call Auction restriction with 2% price band severely limits liquidity and price discovery mechanisms. These measures are likely to result in reduced trading volumes, wider bid-ask spreads, and potential price volatility in affected securities. Investors holding these securities should note that these are surveillance measures and not adverse actions against the companies themselves.

Impact Justification

Significant trading restrictions with 100% margin requirement and shift to Trade-for-Trade segment affecting 6 securities, directly impacting liquidity and trading patterns