Description

NSE imposes Short-Term Additional Surveillance Measure (ST-ASM) Stage I on 4 securities with increased margin requirements effective January 7, 2026, and excludes 2 securities from ASM framework.

Summary

National Stock Exchange of India Limited has issued a surveillance circular applying Short-Term Additional Surveillance Measure (ST-ASM) Stage I to four securities effective January 6, 2026. The measure increases margin requirements to 50% or existing margin (whichever is higher), capped at 100%. Additionally, two securities are being excluded from the ASM framework.

Key Points

  • Four securities included in ST-ASM Stage I: K2 Infragen Limited (K2INFRA), Mangalam Drugs And Organics Limited (MANGALAM), Shivalic Power Control Limited (SPCL), and Vivimed Labs Limited (VIVIMEDLAB)
  • Margin requirement increases to 50% or existing margin, whichever is higher, with maximum cap at 100%
  • Two securities excluded from ASM framework: Modi Rubber Limited (MODIRUBBER) and Sasken Technologies Limited (SASKEN)
  • No securities shortlisted for ST-ASM Stage II
  • No securities moving between Stage I and Stage II
  • ASM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting under ASM is purely for market surveillance purposes and not an adverse action against companies

Regulatory Changes

This circular continues the implementation of the Additional Surveillance Measure (ASM) framework previously established through circulars NSE/SURV/39265 (October 27, 2018), NSE/SURV/46557 (December 4, 2020), NSE/SURV/52144 (April 28, 2022), NSE/SURV/58558 (September 25, 2023), and NSE/SURV/64066 (September 20, 2024). The ST-ASM Stage I surveillance action involves enhanced margin requirements for securities meeting specific surveillance criteria.

Compliance Requirements

  • NSE members must apply 50% margin or existing margin (whichever is higher) on all open positions as of January 6, 2026 and new positions created from January 7, 2026
  • Maximum margin rate is capped at 100%
  • Members must comply with margin requirements for the four securities entering ST-ASM Stage I
  • All other prevailing surveillance measures remain applicable alongside ASM framework

Important Dates

  • January 5, 2026: Circular issued (Circular Ref. No. 09/2026)
  • January 6, 2026: ST-ASM Stage I applicability begins for shortlisted securities; two securities excluded from ASM framework
  • January 7, 2026: Enhanced margin requirements take effect on all open positions and new positions

Impact Assessment

Market Impact: The inclusion of four securities in ST-ASM Stage I will increase trading costs and capital requirements for market participants holding or trading these stocks. The 50% minimum margin requirement (up to 100% cap) will significantly reduce leverage available to traders and may result in reduced liquidity and trading volumes in these securities.

Investor Impact: Existing position holders in K2INFRA, MANGALAM, SPCL, and VIVIMEDLAB must ensure adequate margin funding by January 7, 2026. Insufficient margins may lead to position liquidation. New investors will face higher capital requirements for taking positions.

Positive Development: The exclusion of MODIRUBBER and SASKEN from ASM framework indicates improved market behavior, potentially restoring normal margin requirements and trading conditions for these securities.

Operational Impact: Brokers and trading members need to update their risk management systems to reflect the new margin requirements and communicate changes to affected clients promptly.

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

Impact Justification

Medium importance as it affects specific securities with enhanced margin requirements of 50% minimum. Direct impact on traders and investors holding positions in the 4 securities entering ST-ASM Stage I, requiring increased capital commitment.