Exchanges (PDF) mandate brokers to display a notification mentioning all the surveillance measures on the instrument when the client tries to place an order.
SEBI and Exchanges jointly decided to introduce Enhanced Surveillance Measure (ESM) framework for Micro-Small Companies (Market cap less than 500 crores). The NSE circular (PDF) specifies the criteria applicable to companies under ESM. This requirement aims to ensure that investors make informed decisions before buying a specific stock.
ESM consists of two stages. In Stage 1 of ESM, the trade settlement for a stock will follow a Trade for Trade mechanism with a price band of 5%. However, if the instrument is already in a 2% price band, that band will be applicable instead.
In Stage 2 of ESM, the trade settlement continues to follow the Trade for Trade mechanism but with a reduced price band of 2%. Moreover, during this stage, trading is permitted on all trading days through a Periodic Call Auction.