Description

NSE adds Loyal Textile Mills Limited to Enhanced Surveillance Measure (ESM) Stage I with 100% margin requirement and trade-for-trade settlement effective February 12, 2026.

Summary

NSE has issued circular 105/2026 regarding the applicability of Enhanced Surveillance Measure (ESM). Loyal Textile Mills Limited (LOYALTEX, ISIN: INE970D01010) has been added to ESM Stage I effective February 11, 2026. The security will attract a minimum 100% margin requirement and will be shifted from Rolling Settlement segment (EQ/SM series) to Trade-for-Trade segment (BE/ST series) from February 12, 2026. No securities are being moved between stages or excluded from the ESM framework in this update.

Key Points

  • One security added to ESM Stage I: Loyal Textile Mills Limited (LOYALTEX)
  • 100% minimum margin applicable on all open positions as on February 11, 2026 and new positions from February 12, 2026
  • Security will shift from Rolling Settlement (EQ/SM) to Trade-for-Trade segment (BE/ST) effective February 12, 2026
  • No securities moving from Stage I to Stage II or vice versa
  • No securities being excluded from ESM framework
  • Consolidated ESM list includes multiple securities across Stage I and Stage II (partial list showing CURAA, DHARIWAL, DPEL in Stage II)
  • ESM framework operates in conjunction with all other prevailing surveillance measures

Regulatory Changes

The Enhanced Surveillance Measure (ESM) framework continues to be applied based on predefined market surveillance criteria. Securities qualifying under ESM are subject to:

  • Mandatory shift from Rolling Settlement to Trade-for-Trade settlement mechanism
  • Enhanced margin requirements of minimum 100%
  • Securities moving to Stage II are additionally placed under Trade-for-Trade with 2% price band under Periodic Call Auction

This action is purely on account of market surveillance and should not be construed as adverse action against the concerned company.

Compliance Requirements

  • NSE members must ensure 100% margin collection on LOYALTEX for all open positions as on February 11, 2026
  • 100% margin must be collected on all new positions in LOYALTEX created from February 12, 2026 onwards
  • Trading members must adapt to Trade-for-Trade settlement mechanism for the affected security from February 12, 2026
  • Market participants must comply with all other prevailing surveillance measures in conjunction with ESM
  • For queries, members may contact NSE at surveillance@nse.co.in

Important Dates

  • February 10, 2026: Circular issue date
  • February 11, 2026: ESM Stage I applicability date; 100% margin applies to existing open positions
  • February 12, 2026: Security shifts from EQ/SM to BE/ST series; 100% margin applies to all new positions

Impact Assessment

Market Impact: High - The inclusion of Loyal Textile Mills Limited in ESM Stage I will significantly impact its trading dynamics. The 100% margin requirement substantially increases capital costs for traders and investors holding positions in this security.

Liquidity Impact: The shift to Trade-for-Trade segment (BE/ST series) eliminates the possibility of netting positions and requires delivery-based settlement for all transactions, which typically reduces liquidity and trading volumes.

Investor Impact: Existing position holders must arrange for 100% margin by February 11, 2026. The trade-for-trade mechanism from February 12, 2026 means investors cannot engage in intraday trading and must take/give delivery of shares.

Operational Impact: Brokers and trading members need to update their risk management systems to ensure mandatory 100% margin collection and adjust settlement processes for trade-for-trade mechanism. The surveillance measure aims to curb excessive speculation and ensure price stability in the affected security.

Impact Justification

Mandatory 100% margin requirement and shift to trade-for-trade segment significantly impacts trading in affected security, restricting liquidity and increasing capital requirements for market participants.