Description

NSE updates the list of securities under Enhanced Surveillance Measure (ESM) framework with securities moving in, out, and between stages effective December 2025.

Summary

NSE has updated the Enhanced Surveillance Measure (ESM) framework with new securities being added to Stage I and existing securities moving between stages. Three securities (CBAZAAR, MANOMAY, VENUSREM) will be included in ESM Stage I with 100% margin requirements and shift from rolling settlement to Trade-for-Trade segment. Three securities (BIRDYS, MCLEODRUSS, SALSTEEL) are moving from Stage II to Stage I. Securities under ESM Stage II will be subject to Trade-for-Trade with 2% price band under Periodic Call Auction.

Key Points

  • Three new securities added to ESM Stage I: Net Avenue Technologies Limited (CBAZAAR), Manomay Tex India Limited (MANOMAY), and Venus Remedies Limited (VENUSREM)
  • These securities will shift from Rolling Settlement segment (Series: EQ/SM) to Trade-for-Trade segment (Series: BE/ST) from December 02, 2025
  • Minimum 100% margin applicable on all open positions as on December 01, 2025 and new positions from December 02, 2025
  • Three securities moving from Stage II to Stage I: Grill Splendour Services Limited (BIRDYS), Mcleod Russel India Limited (MCLEODRUSS), and S.A.L. Steel Limited (SALSTEEL)
  • Securities shifting to Stage II will be under Trade-for-Trade with 2% price band under Periodic Call Auction from December 01, 2025
  • 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 to the Enhanced Surveillance Measure framework originally introduced through circulars dated June 02, 2023, July 18, 2023, August 09, 2024, September 20, 2024, October 04, 2024, and July 25, 2025. Securities qualifying under ESM are shifted from regular rolling settlement to Trade-for-Trade segment with enhanced margin requirements. Stage II securities are additionally subjected to Periodic Call Auction with restricted 2% price band.

Compliance Requirements

  • Market participants must ensure 100% margin is maintained on all open positions in ESM Stage I securities from December 01, 2025
  • Trading members must note the shift of specified securities from EQ/SM series to BE/ST series effective December 02, 2025
  • Participants must comply with Trade-for-Trade settlement requirements for all ESM securities
  • For Stage II securities, trading will be restricted to Periodic Call Auction mechanism with 2% price band
  • Members should refer to consolidated list in Annexure III for complete overview of securities under ESM framework

Important Dates

  • December 01, 2025: 100% margin applicable on all open positions in newly included ESM Stage I securities; Stage II securities shift to Trade-for-Trade with 2% price band under Periodic Call Auction
  • December 02, 2025: Securities shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST); 100% margin applicable on new positions in ESM Stage I securities

Impact Assessment

Trading Impact: The shift to Trade-for-Trade segment eliminates intraday trading and netting off of positions for affected securities, significantly reducing liquidity and trading flexibility.

Margin Impact: 100% margin requirement substantially increases capital requirements for traders holding positions in CBAZAAR, MANOMAY, and VENUSREM, potentially forcing position closures.

Price Discovery: The 2% price band restriction for Stage II securities under Periodic Call Auction will limit price movements and may cause difficulty in execution for larger orders.

Market Participation: Enhanced surveillance measures typically reduce retail participation due to higher capital requirements and trading restrictions, potentially widening bid-ask spreads.

Positive Movement: Three securities (BIRDYS, MCLEODRUSS, SALSTEEL) moving from Stage II to Stage I indicates improved market behavior, though they remain under surveillance with 100% margin requirements.

Impact Justification

High impact due to 100% margin requirement, shift to Trade-for-Trade segment, and 2% price band restrictions affecting trading in multiple securities