Description

NSE adds securities to ESM framework with 100% margin requirement effective December 04, 2025, including shifts to Trade-for-Trade segment.

Summary

NSE has updated the Enhanced Surveillance Measure (ESM) framework, adding two new securities to Stage I and moving one security from Stage I to Stage II effective December 03-04, 2025. Securities under ESM will attract minimum 100% margin and shift from Rolling Settlement to Trade-for-Trade segment. Stage II securities will be under Trade for Trade with 2% price band under Periodic Call Auction.

Key Points

  • Two securities added to ESM Stage I: Coastal Corporation Limited (COASTCORP) and TREJHARA SOLUTIONS LIMITED (TREJHARA)
  • One security moving from Stage I to Stage II: Latteys Industries Limited (LATTEYS)
  • No securities being excluded from ESM framework
  • 100% margin applies to all open positions as on December 03, 2025 and new positions from December 04, 2025
  • Securities shifting from EQ/SM series to BE/ST series (Trade-for-Trade segment)
  • Stage II securities under Trade for Trade with 2% price band under Periodic Call Auction
  • ESM framework operates in conjunction with all other prevailing surveillance measures

Regulatory Changes

Securities qualifying under ESM will be shifted from Rolling Settlement segment (Series: EQ/SM) to Trade-for-Trade segment (Series: BE/ST) effective December 04, 2025. Stage II securities will operate under Periodic Call Auction with 2% price band effective December 03, 2025.

Compliance Requirements

  • Market participants must ensure 100% margin coverage for all open positions in ESM securities as on December 03, 2025
  • New positions created from December 04, 2025 will require minimum 100% margin
  • Trading in affected securities will be restricted to Trade-for-Trade basis (no intraday trading)
  • Stage II securities (LATTEYS) subject to 2% price band and Periodic Call Auction mechanism

Important Dates

  • December 02, 2025: Circular issued
  • December 03, 2025: Stage II periodic call auction with 2% price band becomes effective; 100% margin applies to existing open positions
  • December 04, 2025: Securities shift to Trade-for-Trade segment (BE/ST series); 100% margin applies to new positions; COASTCORP and TREJHARA move from EQ/SM to BE/ST

Impact Assessment

High Impact: The imposition of 100% margin requirement significantly increases capital requirements for traders holding positions in these securities. The shift to Trade-for-Trade segment eliminates intraday trading opportunities and reduces liquidity. For LATTEYS moving to Stage II, the 2% price band and Periodic Call Auction mechanism further restricts price discovery and trading flexibility. Market participants with existing positions must arrange additional margins immediately or face potential position liquidation. The surveillance action signals elevated risk concerns about these securities, likely leading to reduced trading interest and wider bid-ask spreads.

Impact Justification

Imposes 100% margin requirement and shifts securities to Trade-for-Trade segment, significantly restricting trading and requiring immediate position adjustments