Description

NSE applies Long Term Additional Surveillance Measure (ASM) to securities with 100% margin requirement and potential trade-for-trade shift effective February 12, 2026.

Summary

NSE has issued a circular regarding the application of Long Term Additional Surveillance Measure (ASM) to certain securities effective February 12, 2026. Two securities - Gayatri Rubbers And Chemicals Limited (GRCL) and Yudiz Solutions Limited (YUDIZ) - have been included in Long-Term ASM Framework Stage-I, moving from Short-Term ASM (STASM). These securities will be subject to 100% margin requirements on all open and new positions. Securities qualifying under criteria VII would also be shifted from Rolling Settlement (EQ) to Trade-for-Trade segment (BE), though no securities currently meet this criterion.

Key Points

  • Two securities added to Long-Term ASM Framework Stage-I: GRCL (INE0LVM01018) and YUDIZ (INE09FA01019)
  • Both securities moved from STASM to LTASM framework
  • 100% margin requirement applicable on all positions from February 12, 2026
  • Margin applies to open positions as on February 11, 2026 and new positions from February 12, 2026 onwards
  • No securities currently moving between stages (Stage I to II, Stage II to III, or Stage I to IV)
  • No securities being shifted to Trade-for-Trade segment at this time
  • 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

This circular implements the Long-Term Additional Surveillance Measure framework as established under previous circulars NSE/SURV/39265 (October 27, 2018), NSE/SURV/45111 (July 22, 2020), NSE/SURV/46557 (December 04, 2020), NSE/SURV/48506 (June 04, 2021), NSE/SURV/52090 (April 22, 2022), NSE/SURV/63362 (August 09, 2024), and NSE/SURV/64066 (September 20, 2024).

The specific regulatory action is the escalation of surveillance measures on GRCL and YUDIZ from short-term to long-term ASM framework, indicating sustained concerns requiring enhanced monitoring.

Compliance Requirements

For Trading Members:

  • Ensure 100% margin collection on GRCL and YUDIZ from February 12, 2026
  • Apply margin requirements to all open positions as on February 11, 2026
  • Apply margin requirements to all new positions created from February 12, 2026 onwards
  • Update risk management systems to reflect the enhanced margin requirements
  • Comply with all other prevailing surveillance measures alongside ASM

For Investors:

  • Must provide 100% upfront margin for trading in GRCL and YUDIZ
  • Existing positions will be subject to 100% margin requirement

Important Dates

  • February 09, 2026: Circular issue date
  • February 10, 2026: Effective date for securities shortlisted in Long-Term ASM Framework Stage-I
  • February 11, 2026: Last day before margin requirements apply; open positions as on this date subject to 100% margin
  • February 12, 2026: 100% margin requirement becomes applicable on all positions

Impact Assessment

Market Impact:

  • Severe restriction on trading activity in GRCL and YUDIZ due to 100% margin requirement
  • Significantly reduced liquidity in these securities
  • Potential price volatility as market participants adjust positions
  • Higher capital requirements for maintaining positions may lead to forced exits

Operational Impact:

  • Trading members must update margin systems and risk management frameworks
  • Increased monitoring and compliance burden for brokers
  • Potential strain on client relationships due to additional margin calls

Investor Impact:

  • Existing position holders face immediate margin calls
  • New investors require full cash upfront, eliminating leverage
  • Reduced trading appeal for these securities
  • Signal of regulatory concern may impact investor sentiment

The move from STASM to LTASM indicates sustained surveillance concerns, suggesting underlying issues with price movements, volatility, or other market integrity factors in these securities.

Impact Justification

100% margin requirement significantly restricts trading and potential shift to trade-for-trade segment severely impacts liquidity for affected securities