Description

NSE circular on inclusion of securities under Long Term Additional Surveillance Measure with 100% margin requirement and potential trade-for-trade segment shift effective February 5, 2026.

Summary

NSE has issued a surveillance circular regarding the applicability of Long Term Additional Surveillance Measure (ASM) framework. Securities meeting ASM criteria will face 100% margin requirements on all positions effective February 5, 2026. Additionally, securities qualifying under Criteria VII (Stage IV) will be shifted from Rolling Settlement segment (Series: EQ) to Trade-for-Trade segment (Series: BE). Currently, Mahickra Chemicals Limited has been shortlisted under Long-Term ASM Framework Stage-I.

Key Points

  • One security (MAHICKRA - Mahickra Chemicals Limited, ISIN: INE961Y01015) shortlisted in Long-Term ASM Framework Stage-I effective February 3, 2026
  • 100% margin requirement applicable on all open positions as on February 4, 2026 and new positions from February 5, 2026 onwards
  • Securities in Stage IV will be shifted from Rolling Settlement (EQ series) to Trade-for-Trade segment (BE series)
  • Currently no securities listed for Stage IV or inter-stage movements (Stage I to II, Stage II to III, Stage I to IV, Stage II to IV)
  • ASM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting is purely for market surveillance purposes and not an adverse action against the company

Regulatory Changes

This circular implements the Long-Term ASM framework as per previous circulars (NSE/SURV/39265, NSE/SURV/45111, NSE/SURV/46557, NSE/SURV/48506, NSE/SURV/52090, NSE/SURV/63362, and NSE/SURV/64066). The framework includes:

  • Imposition of 100% margin requirement for securities meeting ASM criteria
  • Four-stage surveillance framework with escalating measures
  • Transfer mechanism from rolling settlement to trade-for-trade for Stage IV securities
  • Application of surveillance measures on T+3 basis (T being date of circular issuance)

Compliance Requirements

  • All NSE members must apply 100% margin requirement for MAHICKRA effective February 5, 2026
  • Margin applies to both existing open positions as on February 4, 2026 and all new positions created from February 5, 2026
  • Members must monitor for any securities moving to Stage IV which would require trade-for-trade settlement
  • Members should refer to FAQs at https://www.nseindia.com/regulations/additional-surveillance-measure for detailed framework understanding
  • Queries to be directed to surveillance@nse.co.in

Important Dates

  • February 2, 2026: Circular issuance date
  • February 3, 2026: Effective date for ASM Stage-I shortlisting
  • February 4, 2026: Last day for existing positions before new margin requirement
  • February 5, 2026: 100% margin requirement becomes applicable on all positions
  • T+3 basis: Timeline for shifting Stage IV securities from EQ to BE series (where T is circular date)

Impact Assessment

Trading Impact: The 100% margin requirement significantly restricts leveraged trading in MAHICKRA, requiring full upfront capital for any positions. This will substantially reduce trading volumes and liquidity in the affected security.

Market Participants: Existing position holders must ensure adequate margins by February 5, 2026, or face potential liquidation. New traders will need full capital commitment, eliminating intraday leverage opportunities.

Liquidity: Enhanced surveillance measures typically result in reduced market participation, wider bid-ask spreads, and lower trading volumes. The potential shift to trade-for-trade segment for Stage IV securities further restricts liquidity by eliminating intraday trading.

Investor Sentiment: While NSE clarifies this is not adverse action against the company, ASM inclusion generally signals heightened regulatory scrutiny and may negatively impact investor confidence in the affected securities.

Impact Justification

High margin requirement of 100% significantly impacts trading in affected securities. Potential shift to trade-for-trade segment restricts liquidity. Currently affects MAHICKRA with framework for Stage-IV securities to move from rolling settlement to trade-for-trade.