Markets Glossary
ASM / GSM Surveillance
SEBI-and-exchange surveillance frameworks that place unusual or risky stocks under trading restrictions — higher margins, tighter bands, or trade-for-trade settlement.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
ASM (Additional Surveillance Measure) and GSM (Graded Surveillance Measure) are frameworks under which NSE and BSE, in coordination with SEBI, restrict trading in stocks showing unusual price/volume behaviour or weak fundamentals. Measures escalate by stage and include 100% margin requirements, 5% price bands, trade-for-trade settlement (no intraday squaring), and in higher GSM stages, trading permitted only periodically with an additional surveillance deposit.
ASM targets unusual market activity broadly; GSM targets securities with weak fundamentals relative to their price behaviour.
India Context
Exchanges publish the ASM/GSM lists and stage movements regularly, and inclusion is mechanical — driven by objective criteria like price variation, volatility, and delivery patterns rather than a judgment on the company. Practically, inclusion drains speculative volume (intraday traders exit when settlement turns trade-for-trade), which often deflates momentum-driven rallies. A stock entering ASM during a sharp rally is a documented caution flag worth weighing against whatever story is driving the price.
Example
A mid-cap doubles in six weeks on a turnaround narrative. The exchange moves it to ASM Stage I, then Stage IV — 100% margins and a 5% band. Intraday volume collapses, and the stock retraces most of the move. The surveillance notices, published by the exchange with dates, bracket the entire episode.
Frequently Asked Questions
Does ASM/GSM inclusion mean the company did something wrong?
No. Inclusion is based on objective surveillance criteria on trading behaviour, not a finding of wrongdoing. But it does mean the exchange sees risk worth restricting — relevant context for any bullish narrative.
What is trade-for-trade settlement?
Every trade must result in delivery — no intraday buying and selling of the same shares. It removes speculative churn, which is why volumes typically fall sharply once a stock enters trade-for-trade.
Related Terms
Apply what you've learned
See this term at work on real Indian companies.
AletheiaAI checks market narratives against the filings behind them — screener, company disclosures, and sector reports across India’s listed companies, free.