Description

NSE imposes Enhanced Surveillance Measure (ESM) on select securities with 100% margin requirement and trade-for-trade settlement effective February 9, 2026.

Summary

NSE has issued Circular No. 91/2026 imposing Enhanced Surveillance Measure (ESM) on select securities effective February 6-9, 2026. Two securities (DJML and SCPL) will be included in ESM Stage-I with 100% minimum margin requirement and shift from Rolling Settlement (EQ/SM series) to Trade-for-Trade segment (BE/ST series). One security (SVPGLOB) will move from Stage-I to Stage-II with periodic call auction and 2% price band. No securities are being excluded from the ESM framework.

Key Points

  • Two securities added to ESM Stage-I: DJ Mediaprint & Logistics Limited (DJML) and Sheetal Cool Products Limited (SCPL)
  • 100% minimum margin applicable on all open positions as of February 6, 2026 and new positions from February 9, 2026
  • Securities shifting from Rolling Settlement segment (EQ/SM) to Trade-for-Trade segment (BE/ST) effective February 9, 2026
  • SVP GLOBAL TEXTILES LIMITED (SVPGLOB) moving from Stage-I to Stage-II with Trade-for-Trade under Periodic Call Auction with 2% price band
  • No securities moving from Stage-II to Stage-I
  • No securities being excluded from ESM framework
  • ESM framework operates in conjunction with all other prevailing surveillance measures

Regulatory Changes

The Exchange has implemented enhanced surveillance on securities meeting specific criteria outlined in previous circulars (NSE/SURV/56948, NSE/SURV/57609, NSE/SURV/63361, NSE/SURV/64066, NSE/SURV/64400, and NSE/SURV/69315). Securities under ESM Stage-II face additional restrictions including periodic call auction mechanism with restricted price bands of 2%.

Compliance Requirements

  • Market participants must ensure 100% margin for identified securities from February 9, 2026
  • Trading members must note the shift of identified securities to Trade-for-Trade segment (BE/ST series)
  • Existing positions in affected securities as of February 6, 2026 will be subject to enhanced margin requirements
  • Members must comply with Trade-for-Trade settlement mechanism for all transactions in affected securities
  • Stage-II securities subject to Periodic Call Auction with 2% price band from February 6, 2026

Important Dates

  • February 5, 2026: Circular issue date
  • February 6, 2026: Stage-II securities (SVPGLOB) come under Trade-for-Trade with 2% price band under Periodic Call Auction
  • February 6, 2026: 100% margin applicable on all open positions
  • February 9, 2026: Stage-I securities (DJML, SCPL) shift from EQ/SM to BE/ST series
  • February 9, 2026: 100% margin applicable on new positions created from this date

Impact Assessment

Trading Impact: Severe restriction on trading as securities move to Trade-for-Trade segment, eliminating intraday trading opportunities. Stage-II securities further restricted with periodic call auction mechanism.

Liquidity Impact: Significant reduction in liquidity expected due to 100% margin requirement and T+T settlement. This will likely reduce participation from traders and increase bid-ask spreads.

Capital Requirements: Traders and investors must arrange 100% upfront margin, substantially increasing capital requirements for positions in these securities.

Price Discovery: Stage-II securities under periodic call auction with 2% price band will face restricted price discovery mechanism, potentially leading to order buildup and execution delays.

Market Perception: Inclusion in ESM may be viewed negatively by market participants despite NSE’s clarification that it should not be construed as adverse action against the companies. This could lead to selling pressure and price volatility.

Impact Justification

High importance due to mandatory 100% margin requirement and shift to trade-for-trade settlement for affected securities, significantly impacting trading and liquidity.