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      Question

      What distinguishes SEBI’s revised Enhanced

      Surveillance Mechanism (ESM) for small-cap stocks? 
      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. 

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