Description

NSE notifies inclusion of securities under Enhanced Surveillance Measure (ESM) with mandatory 100% margin requirement effective March 25, 2026, including Stage I to Stage II upgrades for PARASPETRO and UCL.

Summary

NSE has issued an update on the Enhanced Surveillance Measure (ESM) framework, notifying securities moving between ESM stages effective March 24-25, 2026. Two securities (PARASPETRO and UCL) are upgraded from ESM Stage I to Stage II. No new securities are added to Stage I and none are excluded from the framework. Securities under ESM will attract a minimum 100% margin and be shifted to the Trade-for-Trade segment.

Key Points

  • No new securities added to ESM Stage I
  • PARASPETRO (Paras Petrofils Limited, INE162C01024) moves from Stage I to Stage II w.e.f. March 24, 2026
  • UCL (Ushanti Colour Chem Limited, INE00NI01015) moves from Stage I to Stage II w.e.f. March 24, 2026
  • No securities moving from Stage II back to Stage I
  • No securities excluded from the ESM framework
  • Minimum 100% margin applicable on all open positions as on March 24, 2026, and new positions from March 25, 2026
  • ESM securities shifted from Rolling Settlement (EQ/SM series) to Trade-for-Trade segment (BE/ST series) w.e.f. March 25, 2026
  • Stage II securities subject to Trade-for-Trade with 2% price band under Periodic Call Auction w.e.f. March 24, 2026

Regulatory Changes

The circular is issued under the ESM framework established through prior circulars: NSE/SURV/56948, NSE/SURV/57609, NSE/SURV/63361, NSE/SURV/64066, NSE/SURV/64400, and NSE/SURV/69315. No structural changes to the framework are introduced; this circular applies the existing framework to updated securities.

Compliance Requirements

  • NSE members must ensure minimum 100% margin is collected on all open positions in ESM securities as on March 24, 2026
  • Members must apply 100% margin on new positions in ESM securities created from March 25, 2026
  • Trading in affected securities must be conducted in the Trade-for-Trade segment (BE/ST series) from March 25, 2026
  • Stage II securities (including PARASPETRO and UCL) must be traded under Periodic Call Auction with a 2% price band from March 24, 2026
  • ESM framework applies in conjunction with all other prevailing surveillance measures

Important Dates

  • March 23, 2026: Circular issued
  • March 24, 2026: Stage I to Stage II transition effective for PARASPETRO and UCL; Stage II Periodic Call Auction with 2% price band begins
  • March 25, 2026: 100% margin requirement on new positions; shift to Trade-for-Trade segment (BE/ST series) effective

Impact Assessment

Trading in PARASPETRO and UCL will be significantly restricted following their upgrade to ESM Stage II. These securities will move to Periodic Call Auction with a narrow 2% price band, severely limiting intraday price movement and liquidity. The mandatory 100% margin requirement eliminates leverage for traders in these securities. The consolidated ESM list continues to include ABMINTLLTD, ASCOM, CURAA, GSTL, and others. The ESM classification is a surveillance action and does not constitute an adverse regulatory finding against the companies themselves.

Impact Justification

Mandatory 100% margin requirement and shift to Trade-for-Trade segment directly restricts trading in affected securities; Stage II securities face additional 2% price band under Periodic Call Auction, significantly limiting liquidity and trading activity.