Description

NSE implements Short-Term Additional Surveillance Measure (ST-ASM) Stage I on two securities - De Neers Tools Limited and Holmarc Opto-Mechatronics Limited, with 50% margin requirements effective December 5, 2025.

Summary

NSE has placed two securities under Short-Term Additional Surveillance Measure (ST-ASM) Stage I effective December 4, 2025. The affected securities are De Neers Tools Limited (DENEERS) and Holmarc Opto-Mechatronics Limited (HOLMARC). These securities will be subject to enhanced margin requirements of 50% or existing margin (whichever is higher), capped at a maximum of 100%, applicable to both existing open positions and new positions created from December 5, 2025.

Key Points

  • Two securities shortlisted for ST-ASM Stage I: De Neers Tools Limited (INE0JWV01011) and Holmarc Opto-Mechatronics Limited (INE0LXA01019)
  • No securities currently in ST-ASM Stage II
  • No securities moving between stages or being excluded from ASM framework
  • Margin requirements: 50% or existing margin, whichever is higher, subject to maximum 100%
  • ASM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting is purely for market surveillance purposes and not an adverse action against the company

Regulatory Changes

This circular implements the Short-Term Additional Surveillance Measure framework as per previous Exchange circulars (NSE/SURV/39265 dated October 27, 2018, NSE/SURV/46557 dated December 4, 2020, NSE/SURV/52144 dated April 28, 2022, NSE/SURV/58558 dated September 25, 2023, and NSE/SURV/64066 dated September 20, 2024). The enhanced surveillance measure is designed to address market volatility and unusual price movements in specific securities.

Compliance Requirements

  • Market participants must maintain minimum margin of 50% or existing margin (whichever is higher) on all open positions in affected securities as on December 4, 2025
  • Same margin requirements apply to new positions created from December 5, 2025 onwards
  • Maximum margin rate capped at 100%
  • Trading members must ensure adequate margin collection from clients before accepting orders in these securities
  • Members should inform clients about the enhanced surveillance measures and associated margin requirements

Important Dates

  • December 3, 2025: Circular issued (Reference No. 936/2025)
  • December 4, 2025: Securities included in ST-ASM Stage I list
  • December 5, 2025: Enhanced margin requirements become applicable for both existing open positions (as on December 4, 2025) and all new positions

Impact Assessment

Trading Impact: The 50% minimum margin requirement (or higher) will significantly increase the capital requirements for traders and investors holding positions in DENEERS and HOLMARC. This will reduce leverage and may lead to position squaring by participants unable to meet enhanced margin requirements.

Liquidity Impact: Higher margins typically reduce trading volumes and liquidity in affected securities as participants face higher capital costs. This may lead to wider bid-ask spreads and reduced market depth.

Market Participants: Brokers must ensure systems are updated to enforce higher margins, and clients holding overnight positions in these securities will need to bring in additional funds to meet margin requirements. Failure to meet margins may result in position liquidation.

Investor Sentiment: Inclusion in ST-ASM framework signals regulatory concern about price movements or trading patterns, which may impact investor confidence in these securities despite NSE’s clarification that this is not an adverse action against the companies.

Reference Information: For additional details on Additional Surveillance Measure framework, market participants can refer to NSE’s FAQs at https://www.nseindia.com/regulations/additional-surveillance-measure or contact surveillance@nse.co.in for queries.

Impact Justification

High margin requirements (50% or existing margin, whichever higher, capped at 100%) significantly impact trading in affected securities and impose substantial capital requirements on market participants holding positions in these stocks.