Additional Surveillance Measure (ASM) and Graded Surveillance Measure (GSM) are the measures taken by SEBI and Exchanges to impose trading curbs on excessively volatile stocks and to enhance market integrity and safeguard interest of investors.
This is in continuation of various existing surveillance measures like price band, periodic call auction and transfer of securities to Trade-to-Trade settlement from time to time with surveillance concerns viz. Price variation, Volatility etc.
The objective of the measures is to,
- Alert and advise investors to be extra cautious while dealing in these securities
- Advise market participants to carry out necessary due diligence while dealing in these securities
The surveillance actions applicable for the shortlisted securities are as under
- Securities shall be placed in the Price Band of 5% or lower
- Margins shall be levied at the rate of 100%
- The shortlisted securities shall be further monitored on predetermined objective criteria and would be moved into the Trade for Trade segment once the criteria get satisfied
How does this measure affect the trading?
- On account of this measure, you shall not be allowed to place intraday trades in such security (i.e MIS/CO/BO is not allowed)
- If you try to place intraday order in ASM/GSM stocks then you would receive the following rejection on trading terminal
- For GSM stocks – “RMS:Rule: Restricted basket for entity account-1V40 (client id) across exchange across segment across product”
- For ASM stocks – “RMS:Blocked for ABAN nse_cm broker- VNS Remarks: ASM sq. off order block. block type: SQROFF”
- No leverage is given to buy these stocks which means 100% margin is required
- Only delivery based trading shall be allowed in ASM/GSM scrips. In other words, clients can sell their ASM/GSM holdings and are not allowed to buy it back on the same day and vice versa.
- Such stocks are not allowed for pledging. If the stock is already pledged then collateral margin is not provided for that stock as 100% margin is levied, till the stock is moved out of ASM/GSM.
- No impact of ASM/GSM on corporate action benefits. These benefits will be passed on to the equity holder.
To know the criteria based on which the stocks are categorized as ASM/GSM, please refer to the FAQ section in our ASM / GSM Policy. You may find the list of stocks that are falling under BSE and NSE exchange.