What is BSE's S+ framework?

General
1

What stocks are identified for this group, what are the stages in surveillance action and how are these stocks reviewed?

2

Hello,

52 companies have been moved to BSE’s new S+ framework for enhanced monitoring to curb excess volatility. The ‘S+’ framework consists of the SS group and the ST group. SS group stocks are settled on a normal rolling basis and ST group stocks are settled on a trade to trade basis(Only delivery trades allowed, intraday and BTST not allowed).

Identification of securities for S+ framework is carried out on a monthly basis based on pre-defined objective criteria. After identification, securities part of B/XC/XD group will be moved to SS group while securities part of T group and XT group will be moved to ST group.

There are 3 stages of surveillance action for stocks in S+ category.

Stage 0:

  • Imposition of Weekly and Monthly price bands in addition to existing daily, Quarterly and Yearly price bands.
  • Imposition of very high transaction charges i.e. 1% of transaction value shall be applicable to both buyer and seller.

Stage 1:

  • All existing actions imposed under Stage 0.
  • Shifting to Trade to trade settlement mode.

Stage 2:

  • All existing actions imposed under Stage 0.
  • Additional Surveillance Deposit(ASD) of 200% of Buy value applicable on the buyer.
  • ASD shall be released in the sixth month from the collection month i.e. minimum retention period of 5 months.

A review of securities under S+ Framework shall be carried out bi-annually.
A periodic review of securities under S1 and S2 stages, to assess relaxation of surveillance action if any, shall be carried out on a quarterly basis.

Note: At Zerodha, we do not allow trading in the S+ framework due to the above mentioned surveillance measures and the complications it can cause to the investor if he is unaware of the investment he is making. Shares which are already bought in these groups can be sold out if required.

BSE’s notice for introduction of S+ framework

Also, read more about Graded Surveillance Measure(GSM) here

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