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:

StageTrade & SettlementPrice 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:

A. 5%
B. 2% if the security is already under the 2% price band
* 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%

Only delivery-based trading (T+1 settlement) is permitted for stocks under the T2T segment; intraday trading is not allowed

For more information, refer the circulars on Enhanced Surveillance Measures (ESM) on our Notifications page.

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