Understanding Graded Surveillance Measures (GSM) in Stock Trading

What are Graded Surveillance Measures (GSM) in stock trading?

SEBI and Exchanges, after joint surveillance discussions, have introduced Graded Surveillance Measures (GSM) to monitor stocks. These measures address securities where the price isn't in alignment with the company's financial health and fundamentals, including factors like Earnings, Book value, Fixed assets, Net worth, P/E multiple, and Market Capitalisation.


Understanding the GSM stages:


Stage
Stage Surveillance Actions
I
  1. Applicable margin is 100%.
  2. Price band of 5% or lower as applicable.
II
  1. Trade for Trade with a price band of 5% or lower as applicable.
  2. Additional Surveillance Deposit (ASD) of 50% of trade value to be deposited by the Buyers
III
  1. Trade for Trade with a price band of 5% or lower as applicable.
  2. Trading permitted once a week (Every Monday or 1st trading day of the week).
  3. ASD (100% of trade value) to be deposited by the Buyers.
IV
  1. Trade for Trade with a price band of 5% or lower as applicable.
  2. Trading permitted once a week (Every Monday or 1st trading day of the week).
  3. ASD (100% of trade value) to be deposited by the Buyers with no upward movement.

Points to be noted:

  1. Scrips in GSM stages II, III, & IV are blocked for Intraday and CNC/Delivery.

  2. In stage I, scrips can be bought in Delivery/CNC; Intraday/CO/BO is restricted.

  3. Scrips under GSM have a 100% haircut; you won't get collateral for pledging them.


For a comprehensive understanding about GSM, refer to this NSE FAQ series.

To explore the list of GSM stocks, click here.

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