Description

NSE implements surveillance measures requiring minimum 35% margin for securities of companies with high promoter share encumbrance as per SEBI SAST Regulation 28(3), effective February 5, 2026.

Summary

NSE has updated its surveillance framework for companies with high promoter share encumbrance under SEBI (SAST) Regulation 28(3). Eight securities are being added to the surveillance measure requiring minimum 35% margin in Equity and Equity Derivatives segments, effective February 5, 2026. Six securities are being removed from the framework effective February 3, 2026. The consolidated list now contains 13 securities under this surveillance measure.

Key Points

  • 8 securities added to high encumbrance surveillance measure (Annexure I)
  • 6 securities removed from the surveillance framework (Annexure II)
  • Minimum 35% margin requirement applies to both Equity and Equity Derivatives segments
  • Margin applies to all open positions as on February 4, 2026 and new positions from February 5, 2026
  • Total of 13 securities currently under this surveillance framework
  • Measure applies in conjunction with all other prevailing surveillance measures
  • Based on SEBI (SAST) Regulation 2011, Regulation 28(3) regarding promoter share encumbrance

Regulatory Changes

Securities Added (Effective February 5, 2026):

  1. MSPL - MSP Steel & Power Limited (INE752G01015)
  2. AFCONS - Afcons Infrastructure Limited (INE101I01011)
  3. GENUSPOWER - Genus Power Infrastructures Limited (INE955D01029)
  4. GMRP&UI - GMR Power and Urban Infra Limited (INE0CU601026)
  5. PATELENG - Patel Engineering Limited (INE244B01030)
  6. RTNPOWER - RattanIndia Power Limited (INE399K01017)
  7. TI - Tilaknagar Industries Limited (INE133E01013)
  8. VEDL - Vedanta Limited (INE205A01025)

Securities Removed (Effective February 3, 2026):

  1. SHAREINDIA - Share India Securities Limited (INE932X01026)
  2. BLKASHYAP - B. L. Kashyap and Sons Limited (INE350H01032)
  3. SPMLINFRA - SPML Infra Limited (INE937A01023)
  4. STEELXIND - STEEL EXCHANGE INDIA LIMITED (INE503B01021)
  5. THYROCARE - Thyrocare Technologies Limited (INE594H01019)
  6. VERANDA - Veranda Learning Solutions Limited (INE0IQ001011)

Consolidated List (13 Securities): COHANCE, HINDZINC, JAYNECOIND, TRUALT, VIKRAMSOLR, MSPL, AFCONS, GENUSPOWER, GMRP&UI, PATELENG, RTNPOWER, TI, VEDL

Compliance Requirements

  • Trading members must ensure minimum 35% margin is collected on all positions in the 8 newly added securities
  • Margin requirement applies to both:
    • All open positions existing as on February 4, 2026
    • All new positions created from February 5, 2026 onwards
  • Margin applies across both Equity and Equity Derivatives segments
  • This surveillance measure operates in conjunction with all other existing surveillance measures
  • Members must monitor and comply with margin requirements for the consolidated list of 13 securities

Important Dates

  • February 2, 2026: Circular issued
  • February 3, 2026: 6 securities removed from surveillance framework
  • February 4, 2026: Last day before margin requirements apply to new additions
  • February 5, 2026: 35% margin requirement becomes effective for 8 newly added securities (applies to existing open positions and all new positions)

Impact Assessment

Market Impact:

  • Significant margin increase (35%) will increase capital requirements for traders holding positions in the 8 newly added securities
  • Notable inclusion of large-cap stock VEDL (Vedanta Limited) indicates high promoter encumbrance across market capitalizations
  • Infrastructure and power sector heavily represented (AFCONS, GMR Power, Patel Engineering, RattanIndia Power)

Trading Impact:

  • Higher margin requirements will reduce leverage available to traders
  • May lead to position unwinding or reduced trading volumes in affected securities
  • Increased cost of carry for both equity and derivatives positions
  • Traders with existing open positions must arrange additional margin by February 4, 2026

Risk Management:

  • Measure addresses systemic risk from high promoter share pledging/encumbrance
  • Aligns with SEBI (SAST) Regulation 28(3) disclosure requirements
  • Provides additional buffer against potential promoter share invocation scenarios
  • Six securities graduating out indicates improved encumbrance levels for those companies

Impact Justification

Requires significant 35% margin increase on 8 newly added securities affecting both equity and derivatives trading, with immediate impact on open positions and trading costs for affected stocks.