Description

NSE announces securities shortlisted under Long-Term ASM framework with 100% margin requirement effective February 3, 2026. Two securities affected: Paras Petrofils Limited enters Stage-I and Lotus Eye Hospital moves from Stage-I to Stage-II.

Summary

NSE has shortlisted securities under the Long-Term Additional Surveillance Measure (ASM) framework effective February 3, 2026. The circular mandates 100% margin on all open and new positions for the shortlisted securities. Paras Petrofils Limited has been newly included in Long-Term ASM Stage-I, while Lotus Eye Hospital and Institute Limited is progressing from Stage-I to Stage-II. Securities reaching Stage-IV would additionally be shifted from Rolling Settlement (EQ series) to Trade-for-Trade segment (BE series).

Key Points

  • 100% margin requirement applicable on all open positions as on February 2, 2026 and new positions from February 3, 2026 onwards
  • Paras Petrofils Limited (PARASPETRO, ISIN: INE162C01024) enters Long-Term ASM Framework Stage-I
  • Lotus Eye Hospital and Institute Limited (LOTUSEYE, ISIN: INE947I01017) moves from Stage-I to Stage-II
  • No securities shortlisted for Stage-IV or Stage-II to Stage-III transitions
  • Securities in Stage-IV would be shifted from Rolling Settlement (EQ) to Trade-for-Trade segment (BE)
  • ASM framework operates in conjunction with all other prevailing surveillance measures
  • Price band will be reinstated when securities exit the framework, subject to no other surveillance measures being applicable

Regulatory Changes

The Long-Term ASM framework imposes heightened margin requirements of 100% on shortlisted securities based on surveillance criteria. Stage-IV securities face additional restrictions through mandatory shift to Trade-for-Trade segment, eliminating intraday trading and requiring full upfront payment and delivery. The framework includes multiple stages (I through IV) with progressive escalation of surveillance measures.

Compliance Requirements

  • Members must ensure 100% margin collection on all open positions as of February 2, 2026 for affected securities
  • 100% margin must be collected on all new positions created from February 3, 2026 onwards
  • Trading members must inform clients about the enhanced surveillance status of these securities
  • Compliance with margin requirements is mandatory for both existing and new positions
  • Members should refer to previous circulars (NSE/SURV/39265, NSE/SURV/45111, NSE/SURV/46557, NSE/SURV/48506, NSE/SURV/52090, NSE/SURV/63362, NSE/SURV/64066) for complete ASM framework details

Important Dates

  • January 30, 2026: Circular issuance date
  • February 1, 2026: Effective date for securities shortlisting under Long-Term ASM
  • February 2, 2026: Last day before margin requirements apply to open positions
  • February 3, 2026: 100% margin requirement becomes effective on all open and new positions

Impact Assessment

Market Impact: High margin requirements (100%) will significantly reduce liquidity and trading volumes in affected securities. Traders will need to commit full capital upfront, eliminating leverage opportunities and likely reducing market participation.

Operational Impact: Brokers must update margin systems and risk management frameworks to implement 100% margin collection. Client communication and position monitoring requirements increase substantially.

Investor Impact: Retail and institutional investors face increased capital requirements for trading these securities. Existing position holders must arrange for additional margins immediately. The enhanced surveillance designation may negatively impact investor sentiment and stock prices.

Stage Progression Risk: Movement from Stage-I to Stage-II for LOTUSEYE indicates continued surveillance concerns. Further progression to Stage-IV would result in Trade-for-Trade classification, severely restricting trading flexibility and eliminating intraday opportunities.

The circular emphasizes that ASM shortlisting is purely surveillance-based and should not be construed as adverse action against the companies, though market perception typically treats such measures as negative signals.

Impact Justification

High margin requirement of 100% significantly impacts trading in affected securities. Stage progression indicates continued surveillance concerns requiring enhanced monitoring and capital commitment.