Description

NSE announces securities moving into and between ESM stages with minimum 100% margin requirement and trade-for-trade restrictions effective October 31, 2025.

Summary

NSE has updated the Enhanced Surveillance Measure (ESM) framework, adding securities to Stage I and moving securities between stages effective October 30-31, 2025. Securities under ESM will attract a minimum 100% margin requirement on all positions and will be shifted from Rolling Settlement segment to Trade-for-Trade segment. Stage II securities will additionally be placed under Trade for Trade with 2% price band under Periodic Call Auction.

Key Points

  • 2 securities added to ESM Stage I: Prajay Engineers Syndicate Limited (PRAENG) and Samay Project Services Limited (SAMAY)
  • 4 securities moving from Stage I to Stage II: NORBTEAEXP, PATTECH, PROZONER, PURPLEUTED
  • No securities moving from Stage II to Stage I
  • No securities being excluded from ESM framework
  • Minimum 100% margin applicable on all open positions as on October 30, 2025 and new positions from October 31, 2025
  • Securities shifted from Rolling Settlement (EQ/SM series) to Trade-for-Trade segment (BE/ST series) effective October 31, 2025
  • Stage II securities under Trade for Trade with 2% price band under Periodic Call Auction from October 30, 2025

Regulatory Changes

ESM Stage I Requirements:

  • Securities will attract minimum 100% margin requirement
  • Shift from Rolling Settlement segment (Series: EQ/SM) to Trade-for-Trade segment (Series: BE/ST)
  • Effective date: October 31, 2025

ESM Stage II Additional Requirements:

  • Trade for Trade with 2% price band restriction
  • Periodic Call Auction mechanism
  • Effective date: October 30, 2025

Framework Reference: This circular references previous 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 Market Participants:

  • Ensure compliance with 100% margin requirement on all positions in ESM securities
  • Margin applies to both existing open positions (as on October 30, 2025) and new positions created from October 31, 2025
  • Adjust trading strategies for securities moving to Trade-for-Trade segment
  • Note price band restrictions for Stage II securities

For NSE Members:

  • Monitor client positions in affected securities
  • Communicate changes to clients holding or trading ESM securities
  • Ensure adequate margin collection as per ESM requirements

General Notes:

  • ESM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting under ESM is for market surveillance purposes only and should not be construed as adverse action against the concerned company/entity

Important Dates

  • October 29, 2025: Circular issue date
  • October 30, 2025: Stage II securities come under Trade for Trade with 2% price band under Periodic Call Auction; 100% margin applicable on open positions
  • October 31, 2025: Securities shift from EQ/SM to BE/ST series; 100% margin applicable on new positions created from this date

Impact Assessment

Trading Impact:

  • Significant reduction in trading liquidity for affected securities due to Trade-for-Trade mechanism
  • No intraday trading allowed in T+T segment
  • 2% price band restriction for Stage II securities limits price volatility but also reduces trading flexibility

Margin Impact:

  • 100% margin requirement substantially increases capital requirements for traders
  • Affects both existing positions and new trades
  • May force position closures for undercapitalized traders

Market Participants Affected:

  • Investors/traders holding positions in the 6 affected securities
  • Brokers with client exposure to these securities
  • Market makers and liquidity providers

Operational Impact:

  • Series change from EQ/SM to BE/ST requires system adjustments
  • Periodic Call Auction mechanism for Stage II securities changes order execution process
  • Enhanced monitoring and margin collection requirements for brokers

Further Information: Detailed FAQs available at: https://www.nseindia.com/regulations/enhanced-surveillance-measure-esm Queries may be directed to: surveillance@nse.co.in

Impact Justification

Imposes significant trading restrictions including 100% margin requirement, shift to trade-for-trade segment, and 2% price band for Stage II securities, directly affecting trading liquidity and investor positions.