What is Enhanced Surveillance Measures (ESM)?
To control volatility in small-cap securities, SEBI has enforced Enhanced Surveillance Measures (ESM) for companies that have a market cap of less than Rs. 500 crores from June 5th 2023.
- The parameters to categorise securities under the ESM framework include high-low price variation and close-to-close price varitation.
- Securities of public sector enterprises and banks, and securities on which derivatives products are available will be excluded for the surveillance guidelines.
The ESM framework includes 2 stages:
|Stage||Trade & Settlement||Price Band|
|I||* 100% margin applicable|
* Trade settlement is on Trade-to-Trade (T2T) basis
* The security shall be placed under this category for a minimum of 3 months
|Price band of:|
B. 2% if the security is already under the 2% price band
|II||* 100% margin applicable |
* Trade settlement is on T2T basis
* Trading is permitted once a week and conducted through a Periodic Call Auction
* The security shall be placed under this category for a minimum of 1 month
|Price band of 2%|
For more information, refer the circulars on Enhanced Surveillance Measures (ESM) on our Notifications page.
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