Description

NSE implements Long Term ASM on select securities with 100% margin requirement effective January 1, 2026. Three securities added to Stage-I and one security moved from Stage-I to Stage-II.

Summary

NSE has updated the Additional Surveillance Measure (ASM) framework, adding three securities to Long Term ASM Stage-I and moving one security from Stage-I to Stage-II, effective December 30, 2025. A 100% margin requirement will apply on all positions from January 1, 2026. This circular references previous ASM circulars and emphasizes that ASM is a market surveillance measure and not an adverse action against the companies.

Key Points

  • Three securities added to Long Term ASM Framework Stage-I: Essen Speciality Films Limited (ESFL), Madhav Copper Limited (MCL), and Sadhana Nitrochem Limited (SADHNANIQ)
  • ESFL has been moved from Short Term ASM (STASM) to Long Term ASM (LTASM) framework
  • Uravi Defence and Technology Limited (URAVIDEF) moved from Stage-I to Stage-II
  • 100% margin applicable on all open positions as of December 31, 2025 and new positions from January 1, 2026
  • No securities shifted to Stage-IV or Trade-for-Trade segment in this circular
  • ASM framework operates in conjunction with all other prevailing surveillance measures
  • Securities under Stage-IV would be shifted from Rolling Settlement (EQ) to Trade-for-Trade (BE) segment

Regulatory Changes

The Long Term ASM framework continues with established stages (I through IV) as per previous circulars dating back to October 2018. Securities qualifying under Criteria VII (Stage-IV) would be shifted from Rolling Settlement segment (Series: EQ) to Trade-for-Trade segment (Series: BE), though no securities met this criterion in the current update.

Compliance Requirements

  • Market participants must maintain 100% margin on all positions in the affected securities from January 1, 2026
  • The margin requirement applies to both existing open positions as of December 31, 2025 and all new positions created from January 1, 2026 onwards
  • Members must treat this as a surveillance measure operating alongside other existing surveillance frameworks
  • For queries, members should contact surveillance@nse.co.in

Important Dates

  • December 29, 2025: Circular issued
  • December 30, 2025: Securities shortlisted under Long Term ASM framework become effective
  • December 31, 2025: Last day before 100% margin applies to open positions
  • January 1, 2026: 100% margin requirement becomes effective on all open and new positions

Impact Assessment

High Impact on Affected Securities: The 100% margin requirement significantly reduces leverage availability for traders in ESFL, MCL, SADHNANIQ, and URAVIDEF. This will likely reduce trading volumes and liquidity in these securities.

ESFL Escalation: The movement of Essen Speciality Films Limited from Short Term to Long Term ASM indicates persistent surveillance concerns, suggesting ongoing volatility or unusual trading patterns.

Stage Progression: URAVIDEF’s movement from Stage-I to Stage-II indicates continuing surveillance concerns. Further stage progression could eventually lead to Trade-for-Trade segment placement.

Market Participants: Brokers and traders holding positions in these securities must arrange for full margin funding, which may necessitate position unwinding or additional capital deployment.

Reference Information: Complete ASM framework details and FAQs available at https://www.nseindia.com/regulations/additional-surveillance-measure

Impact Justification

100% margin requirement significantly impacts trading in affected securities. ESFL moved from Short Term to Long Term ASM framework indicating persistent surveillance concerns. Effective date is January 1, 2026.