Description

NSE implements Short-Term Additional Surveillance Measure (ST-ASM) on select securities with enhanced margin requirements of 50% or existing margin (whichever is higher) effective February 6, 2026.

Summary

NSE has issued a surveillance circular implementing Short-Term Additional Surveillance Measure (ST-ASM) on select securities effective February 6, 2026. The measure increases margin requirements to 50% or existing margin (whichever is higher), capped at 100%, for all open and new positions. Three securities are newly included in ST-ASM Stage I, one security moves from Stage I to Stage II, one moves from Stage II to Stage I, and three securities are excluded from the ASM framework entirely.

Key Points

  • New ST-ASM Stage I inclusions: Apar Industries Limited (APARINDS), Avalon Technologies Limited (AVALON), Veritaas Advertising Limited (VERITAAS)
  • Margin requirement: 50% or existing margin, whichever is higher, capped at 100%
  • Effective date: February 6, 2026 for new positions and all open positions as on February 5, 2026
  • Stage transition (I to II): Veekayem Fashion and Apparels Limited (VEEKAYEM)
  • Stage transition (II to I): Antelopus Selan Energy Limited (ANTELOPUS)
  • Exclusions from ASM: Marc Technocrats Limited (MARC), Onesource Specialty Pharma Limited (ONESOURCE), Zenith Steel Pipes & Industries Limited (ZENITHSTL)
  • ASM framework operates in conjunction with all other prevailing surveillance measures
  • Shortlisting is purely for market surveillance and not an adverse action against companies

Regulatory Changes

The circular implements the Short-Term Additional Surveillance Measure framework with mandatory enhanced margin requirements. This is a continuation of the ASM framework established through previous circulars (NSE/SURV/39265 dated October 27, 2018, and subsequent updates). The ST-ASM framework is designed to manage risks associated with securities exhibiting abnormal price movements or other surveillance concerns.

Compliance Requirements

  • Trading members: Must collect and maintain margins of 50% or existing margin (whichever is higher) on the specified securities
  • Margin application: Applies to all open positions as on February 5, 2026 and all new positions created from February 6, 2026
  • Maximum margin cap: 100% of position value
  • Members must ensure compliance with enhanced margin requirements for both existing and new positions in affected securities
  • Compliance must be maintained alongside all other existing surveillance measures

Important Dates

  • February 4, 2026: Circular issue date
  • February 5, 2026: Last day before enhanced margins apply; open positions as of this date subject to new margins
  • February 6, 2026: Enhanced margin requirements become effective for all positions

Impact Assessment

Market Impact: High - The 50% minimum margin requirement significantly reduces leverage available to traders in the affected securities, potentially decreasing trading volumes and liquidity. This measure will increase the cost of holding positions and may lead to position unwinding.

Operational Impact: Trading members must adjust their margin collection systems and risk management frameworks to accommodate the enhanced requirements. Clients holding positions in these securities will face increased margin calls.

Securities Affected: Eight securities are directly impacted through inclusion, stage transitions, or exclusion from the ASM framework. Three securities face new stringent margin requirements, while three are relieved from ASM restrictions.

Investor Impact: Traders and investors in APARINDS, AVALON, and VERITAAS will need to provide substantially higher margins, reducing leverage and potentially forcing position adjustments. Those in MARC, ONESOURCE, and ZENITHSTL benefit from removal of ASM restrictions.

Impact Justification

Significantly increases margin requirements to 50% minimum on affected securities, directly impacting trading costs and leverage for market participants. Affects multiple stocks with stage transitions and exclusions.