What is GSM?

What is GSM?

In continuation with the various measures already implemented, SEBI and Exchanges, pursuant to discussions in joint surveillance meetings, had decided that along with the measures already implemented, there shall be Graded Surveillance Measures (GSM) on securities with price not in proportion with financial health and fundamentals of the company which includes factors like Earnings, Book value, Fixed assets, Net worth, P/E multiple, Market Capitalisation etc. (refer to this FAQ of NSE)


There are 4 Stages to GSM:

Stage

Stage Surveillance Actions

I

Applicable margin rate shall be 100% and price band of 5% or lower as applicable

II

Trade for Trade with price band of 5% or lower as applicable and Additional

Surveillance Deposit (ASD) of 50% of trade value to be deposited by the Buyers


III

Trade for Trade with price band of 5% or lower as applicable and Trading permitted once a week (Every Monday / 1st trading day of the week) and ASD (100% of trade

value) to be deposited by the Buyers


IV

Trade for Trade with price band of 5% or lower as applicable and Trading permitted once a week (Every Monday / 1st trading day of the week) and ASD (100% of trade value) to be deposited by the Buyers with no upward movement.

Points to be noted:

  1. The scrips under GSM stage II, III, & IV will be blocked for both Intraday and CNC/Delivery. 

  2. Under the GSM stage I, the scrips will be available to Buy in Delivery/CNC. However, Intraday/CO/BO will be blocked.

  3. The scrip will be categorized as Trade to Trade settlement and will not be eligible for BTST.

  4. The haircut of the scrips coming under GSM will be 100%, i.e., you’ll not receive any collateral amount for pledging GSM scrips.


For the list of stocks that come under GSM, you can refer here