Description

NSE announces changes to Enhanced Surveillance Measure framework with three securities moving from Stage II to Stage I effective February 1, 2026, and one security excluded from ESM framework.

Summary

NSE has issued updates to the Enhanced Surveillance Measure (ESM) framework effective February 1-2, 2026. Three securities (Alps Industries Limited, Divine Hira Jewellers Limited, and Teerth Gopicon Limited) will move from ESM Stage II back to Stage I. One security (Essar Shipping Limited) will be excluded from the ESM framework entirely. Securities under ESM will shift from Rolling Settlement to Trade-for-Trade segment with 100% margin requirements. Securities moving to Stage II will be placed under Trade for Trade with 2% price band under Periodic Call Auction.

Key Points

  • No new securities added to ESM Stage I
  • No securities moving from Stage I to Stage II
  • Three securities downgraded from Stage II to Stage I: ALPSINDUS (Alps Industries Limited - suspended), DIVINEHIRA (Divine Hira Jewellers Limited), TGL (Teerth Gopicon Limited)
  • One security excluded from ESM framework: ESSARSHPNG (Essar Shipping Limited - suspended)
  • ESM securities will attract minimum 100% margin on all positions
  • Securities will shift from Rolling Settlement segment (Series: EQ/SM) to Trade-for-Trade segment (Series: BE/ST)
  • Securities shifting to Stage II will have 2% price band under Periodic Call Auction
  • ESM framework works in conjunction with other surveillance measures

Regulatory Changes

The circular references previous ESM circulars (NSE/SURV/56948, NSE/SURV/57609, NSE/SURV/63361, NSE/SURV/64066, NSE/SURV/64400, and NSE/SURV/69315) and implements the ongoing Enhanced Surveillance Measure framework. Securities meeting ESM criteria will be subject to:

  • Trade-for-Trade settlement (no intraday squaring off)
  • 100% margin requirements
  • For Stage II securities: 2% price band restriction under Periodic Call Auction mechanism
  • Price band reinstatement to original levels when securities exit the framework (subject to no other surveillance measures)

Compliance Requirements

  • Members must ensure 100% margin is collected on all open positions as on February 1, 2026, and new positions created from February 2, 2026 for securities listed in Annexure III (consolidated ESM list)
  • Trading members must account for Trade-for-Trade settlement requirements for ESM securities effective February 2, 2026
  • Members should refer to the consolidated list in Annexure III for current ESM securities
  • Price band restrictions of 2% apply to Stage II securities under Periodic Call Auction from February 1, 2026

Important Dates

  • February 1, 2026: Securities moving to Stage II come under Trade for Trade with 2% price band under Periodic Call Auction
  • February 1, 2026: 100% margin applicable on all open positions for ESM securities
  • February 2, 2026: Securities shift from Rolling Settlement to Trade-for-Trade segment
  • February 2, 2026: 100% margin applicable on new positions created from this date

Impact Assessment

Market Impact: Limited impact as only four securities are affected in this update. The movement of three securities from Stage II to Stage I represents a relaxation of surveillance (moving away from stricter price band restrictions), while one security is being removed from ESM entirely.

Trading Impact: Securities under ESM face restricted liquidity due to Trade-for-Trade settlement and 100% margin requirements, which may reduce speculative trading activity. Stage II securities face additional restrictions with 2% price band limits.

Investor Impact: Investors holding positions in ESM securities must ensure adequate margin (100%) is maintained. Intraday trading is not permitted in Trade-for-Trade segment. Note that Alps Industries Limited and Essar Shipping Limited are marked as suspended scrips.

Clarification: NSE emphasizes that ESM shortlisting is purely a market surveillance measure and should not be construed as adverse action against the companies. For additional information, market participants can refer to ESM FAQs at https://www.nseindia.com/regulations/enhanced-surveillance-measure-esm or contact surveillance@nse.co.in.

Impact Justification

Affects trading parameters for specific securities with margin and settlement changes, but limited number of securities involved