Understanding ASM & GSM Lists by SEBI

Has one of your stocks suddenly stopped moving, or is it hard to buy or sell? This could be due to regulatory actions like Additional Surveillance Measures (ASM) or Graded Surveillance Measures (GSM) imposed by SEBI and stock exchanges. These measures are designed to ensure market integrity and safeguard investor interests.


What is ASM?

ASM (Additional Surveillance Measures) is a system to monitor stocks that exhibit high volatility or unusual trading activity.


Key Factors Assessed:

  • Significant price changes.
  • Trading concentrated among a few clients.
  • Liquidity (how often the stock is traded).
  • Day-to-day price fluctuations.
  • Market capitalization and diversity of investors.


Types of ASM:

  1. Short-Term Surveillance: Aimed at curbing immediate volatility risks.
  2. Long-Term Surveillance: Targets sustained market stability.


Surveillance Actions for ASM Stocks:

  • No Intraday Leverage: Intraday margin trading is not allowed.
  • Corporate Actions: Corporate benefits (dividends, bonuses, stock splits, etc.) remain unaffected.
  • Pledging Restrictions: ASM-listed stocks cannot be pledged. If a pledged stock enters ASM, it will no longer be eligible for collateral margins.
  • Investor Consent Required: Placing orders for ASM stocks requires explicit investor consent.

Note: Being listed under ASM doesn’t indicate poor company health. SEBI and exchanges review the ASM list every two months, and stocks may be removed if their trading improves.


What is GSM?

GSM (Graded Surveillance Measures) acts as a safety mechanism for the market, focusing on high-risk stocks such as penny stocks with sudden price changes or weak financials.


Key Features of GSM Stocks:

  • Typically risky, low-value, and hard-to-trade stocks.
  • Subject to stringent rules and checks to protect investors.


ASM vs. GSM: A Comparison

FeatureASMGSM
PurposeStabilizes market pricesHighlights high-risk stocks
GoalKeeps market balancedPrevents risky investments
Effect on MarketReduces price swingsLimits speculative trading
Investor BenefitsEnsures a fair market for allProtects from potential losses


Useful Links for More Information


If you have further questions about your stocks under ASM or GSM, feel free to reach out to us!

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