NSE has issued Circular NSE/SURV/74144 (Ref. No. 343/2026) dated May 11, 2026, announcing updates to the Enhanced Surveillance Measure (ESM) framework. Eight securities are newly included under ESM Stage I effective May 12, 2026, and one security (LOYALTEX) is being escalated from Stage I to Stage II. No securities are being excluded from the ESM framework in this cycle. All affected securities will face 100% margin requirements and be shifted to the Trade-for-Trade settlement segment effective May 13, 2026.

Key Points

• 8 new securities added to ESM Stage I: APEXECO, ATMASTCO, BALCO, CHETANA, REGAAL, SUBEXLTD, TIGERLOGS, WEWIN
• 1 security escalated from ESM Stage I to Stage II: LOYALTEX (Loyal Textile Mills Limited), as per BSE
• No securities moving from Stage II to Stage I; no securities excluded from ESM framework
• Minimum 100% margin applicable w.e.f. May 13, 2026, on all open and new positions
• EQ/SM series securities to be shifted to BE/ST (Trade-for-Trade) segment w.e.f. May 13, 2026
• Stage II securities subject to 2% price band under Periodic Call Auction w.e.f. May 12, 2026
• ESM is a surveillance measure and does not constitute adverse regulatory action against the company

Regulatory Changes

This circular updates the ESM framework established under prior circulars NSE/SURV/56948, NSE/SURV/57609, NSE/SURV/63361, NSE/SURV/64066, NSE/SURV/64400, and NSE/SURV/69315 (dated June 2023 through July 2025). The ESM framework operates in conjunction with all other prevailing surveillance measures imposed by the exchanges. Stage II escalation introduces Periodic Call Auction with a 2% price band, restricting price discovery and liquidity further beyond Trade-for-Trade settlement.

Compliance Requirements

• Members must ensure 100% margin collection on all open positions (as on May 12, 2026) and new positions (from May 13, 2026) in ESM-listed securities
• Members must note the segment shift for affected EQ/SM series securities to BE/ST (Trade-for-Trade) effective May 13, 2026
• No intraday trading or netting is permitted in Trade-for-Trade securities; each trade must result in delivery
• For Stage II security (LOYALTEX): trading will occur under Periodic Call Auction with a 2% price band from May 12, 2026

Important Dates

• May 11, 2026: Circular issued
• May 12, 2026: ESM Stage I and Stage II inclusions take effect; Stage II Periodic Call Auction with 2% price band begins for LOYALTEX
• May 13, 2026: 100% margin requirement effective on all open and new positions; EQ/SM to BE/ST segment shift effective for newly included Stage I securities

Impact Assessment

Nine securities across multiple sectors face materially tightened trading conditions. The 100% margin requirement doubles capital requirements for position holders, likely triggering forced unwinding of leveraged positions. The shift from rolling settlement (EQ/SM) to trade-for-trade (BE/ST) eliminates intraday trading benefit and compels physical delivery, significantly reducing speculative activity and liquidity. LOYALTEX faces the harshest restrictions under Stage II — the 2% price band in Periodic Call Auction severely limits price movement and market participation. These measures are expected to cause sharp price adjustments and volume drops in the affected securities upon implementation.