<p>To curb volatility in small-cap counters, leading stock exchanges BSE and NSE have put in place an enhanced surveillance mechanism for companies that have a market cap of less than Rs 500 crore.</p>.<p>The Enhanced Surveillance Measure (ESM) will be effective from June 5.</p>.<p>Sebi and exchanges in a joint meeting have decided to introduce ESM framework for "micro-small" companies (on the main board with market cap less than Rs 500 crore), the National Stock Exchange (NSE) and BSE said in two separate circulars on Friday.</p>.<p>The parameters for shortlisting the securities under the ESM framework include high-low price variation and close-to-close price variation.</p>.<p><strong>Read | <a data-ved="2ahUKEwjmuKCwgar_AhUpqWMGHZuiBfgQxfQBKAB6BAgaEAE" href="https://www.deccanherald.com/business/business-news/nse-launches-real-estate-infrastructure-focused-index-1208585.html">NSE launches real estate, infrastructure focused index</a></strong></p>.<p>Under the framework, the exchanges said, "... the trading for these securities will be settled through a trade for trade mechanism with a price band of 5 per cent or 2 per cent (if the scrip is already in the 2 per cent band)."</p>.<p>"For securities in Stage II, the trading will be settled through a trade for trade mechanism with a price band of 2 per cent. The trading for these securities will be permitted once a week with periodic call auctions."</p>.<p>Further, the securities of public sector enterprises, public sector banks and the securities on which derivative products are available will be excluded from the process of shortlisting under the ESM framework.</p>.<p>The security shall be part of the framework for a minimum period of three months. However, in case a security is under Stage II of the framework, it shall be retained under Stage 2 for a minimum period of one month.</p>.<p>After the completion of one month, in a weekly stage review if such a security's close to close price variation is less than 8 per cent in a month, it can move to Stage I of the ESM framework, the bourses said.</p>.<p>Securities that complete three months in the framework shall be eligible for stage-wise exit if they no longer meet the entry criteria, they added.</p>
<p>To curb volatility in small-cap counters, leading stock exchanges BSE and NSE have put in place an enhanced surveillance mechanism for companies that have a market cap of less than Rs 500 crore.</p>.<p>The Enhanced Surveillance Measure (ESM) will be effective from June 5.</p>.<p>Sebi and exchanges in a joint meeting have decided to introduce ESM framework for "micro-small" companies (on the main board with market cap less than Rs 500 crore), the National Stock Exchange (NSE) and BSE said in two separate circulars on Friday.</p>.<p>The parameters for shortlisting the securities under the ESM framework include high-low price variation and close-to-close price variation.</p>.<p><strong>Read | <a data-ved="2ahUKEwjmuKCwgar_AhUpqWMGHZuiBfgQxfQBKAB6BAgaEAE" href="https://www.deccanherald.com/business/business-news/nse-launches-real-estate-infrastructure-focused-index-1208585.html">NSE launches real estate, infrastructure focused index</a></strong></p>.<p>Under the framework, the exchanges said, "... the trading for these securities will be settled through a trade for trade mechanism with a price band of 5 per cent or 2 per cent (if the scrip is already in the 2 per cent band)."</p>.<p>"For securities in Stage II, the trading will be settled through a trade for trade mechanism with a price band of 2 per cent. The trading for these securities will be permitted once a week with periodic call auctions."</p>.<p>Further, the securities of public sector enterprises, public sector banks and the securities on which derivative products are available will be excluded from the process of shortlisting under the ESM framework.</p>.<p>The security shall be part of the framework for a minimum period of three months. However, in case a security is under Stage II of the framework, it shall be retained under Stage 2 for a minimum period of one month.</p>.<p>After the completion of one month, in a weekly stage review if such a security's close to close price variation is less than 8 per cent in a month, it can move to Stage I of the ESM framework, the bourses said.</p>.<p>Securities that complete three months in the framework shall be eligible for stage-wise exit if they no longer meet the entry criteria, they added.</p>