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    Question

    What distinguishes SEBIā€™s revised Enhanced

    Surveillance Mechanism (ESM) for small-cap stocks?Ā 
    A Removal of all trading restrictions Correct Answer Incorrect Answer
    B Mandatory delisting of volatile stocks Correct Answer Incorrect Answer
    C Tiered surveillance based on price trends and PE ratios Correct Answer Incorrect Answer
    D Inclusion of all BSE-500 companies Correct Answer Incorrect Answer
    E 0% margin requirement for high-risk stocks Correct Answer Incorrect Answer

    Solution

    The updated ESM introduces two stages of surveillance. Stage 1 flags stocks with sharp price movements, while Stage 2 applies to stocks with poor fundamentals or inflated valuations. This ensures investor protection and market stability.Ā 

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