Description

NSE implements Enhanced Surveillance Measure (ESM) on select securities with 100% margin requirement and trade-for-trade settlement effective December 26, 2025.

Summary

NSE has issued an update on the Enhanced Surveillance Measure (ESM) framework, applicable from December 24-26, 2025. The circular identifies securities being included in or moved between ESM stages based on surveillance criteria. Securities under ESM Stage-I will shift from rolling settlement to trade-for-trade segment and attract a minimum 100% margin requirement. Securities moving to Stage-II will be under trade-for-trade with a 2% price band under periodic call auction.

Key Points

  • Mcon Rasayan India Limited (MCON) added to ESM Stage-I effective December 24, 2025
  • MCON will shift from EQ/SM series to BE/ST series (trade-for-trade) from December 26, 2025
  • Alps Industries Limited (ALPSINDUS) moved from ESM Stage-I to Stage-II effective December 24, 2025
  • 100% margin required on all open positions as of December 24, 2025, and new positions from December 26, 2025
  • No securities excluded from ESM framework in this update
  • No securities moved from Stage-II back to Stage-I
  • ESM framework operates in conjunction with all other prevailing surveillance measures

Regulatory Changes

Stage-I Securities (New):

  • MCON (Mcon Rasayan India Limited, ISIN: INE0O4M01019) added to ESM Stage-I
  • Will trade in trade-for-trade segment (Series: BE/ST) instead of rolling settlement (Series: EQ/SM)

Stage Transitions:

  • ALPSINDUS (Alps Industries Limited, ISIN: INE093B01015) upgraded from Stage-I to Stage-II
  • Stage-II securities trade under trade-for-trade with 2% price band under periodic call auction

Current ESM List:

  • Stage-II: ALPSINDUS (Alps Industries Limited), ASLIND (ASL Industries Limited), CURAA (Cura Technologies Limited)
  • Stage-I: MCON (Mcon Rasayan India Limited) and other existing securities

Compliance Requirements

For Market Participants:

  • Ensure 100% margin availability for all positions in ESM Stage-I securities from December 26, 2025
  • Margin applies to both existing open positions as of December 24, 2025, and new positions created thereafter
  • No intraday trading allowed in affected securities (trade-for-trade settlement only)
  • For Stage-II securities, adhere to 2% price band restrictions under periodic call auction from December 24, 2025

Trading Mechanics:

  • Securities moved to trade-for-trade require full upfront payment/delivery
  • No netting of positions allowed
  • Each trade requires separate settlement

Reference 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)
  • NSE/SURV/69315 (July 25, 2025)

Important Dates

  • December 23, 2025: Circular issued
  • December 24, 2025:
    • ESM Stage changes become effective
    • 100% margin applicable on existing open positions
    • Stage-II securities begin trading with 2% price band under periodic call auction
  • December 26, 2025:
    • New securities shift from EQ/SM to BE/ST series (trade-for-trade)
    • 100% margin applicable on new positions created from this date

Impact Assessment

Market Impact:

  • Traders holding positions in MCON must arrange for 100% margin by December 24, 2025
  • Liquidity in affected securities likely to decrease significantly due to trade-for-trade restrictions
  • Intraday trading strategies not possible in ESM securities
  • ALPSINDUS faces additional restriction of 2% price band under periodic call auction in Stage-II

Operational Impact:

  • Higher capital requirements for trading ESM securities (100% upfront margin)
  • Settlement process changes from T+1/T+2 rolling to trade-for-trade delivery
  • Increased compliance monitoring required for affected positions

Risk Mitigation:

  • ESM framework designed to protect market integrity and investor interests
  • Measures prevent excessive speculation and price manipulation
  • Not an adverse action against companies; purely surveillance-based

Investor Considerations:

Impact Justification

Significant impact on affected securities with 100% margin requirement and shift to trade-for-trade settlement, restricting intraday trading and requiring full upfront payment.