ASM and GSM frameworks explained
The Additional Surveillance Measure (ASM) and Graded Surveillance Measure (GSM) frameworks are SEBI / exchange-level surveillance mechanisms that restrict trading on scrips showing unusual price or volume patterns, protecting retail investors from potential pump-and-dump schemes and managing market quality.
ASM and GSM are distinct frameworks
| Framework | Focus | Trigger |
|---|---|---|
| ASM | Volatility, price-volume anomalies | Statistical thresholds (price band, volume, delivery %, etc.) |
| GSM | Fundamental quality, surveillance concerns | Earnings, governance, low-float, illiquidity |
A scrip can be on ASM only, GSM only, both simultaneously, or neither.
ASM framework
ASM has two tracks:
Long-term ASM (LT-ASM)
LT-ASM has 4 stages , with increasing restrictions as the surveillance level escalates. Triggers are computed monthly based on:
- Price increase / decrease beyond defined bands.
- Volume relative to free float.
- Delivery percentage.
- Number of unique clients.
- High-low difference relative to closing price.
Once added to LT-ASM, the scrip stays in surveillance until criteria normalise (typically takes 2-3 months minimum).
Short-term ASM (ST-ASM)
ST-ASM responds to acute price spikes. It is triggered on a single-day or short-window basis when a scrip rises or falls beyond defined thresholds. Restrictions are typically lighter but more frequent.
GSM framework
GSM (Graded Surveillance Measure) targets scrips with fundamental concerns:
- Very low free float.
- Low net worth.
- Earnings decline.
- Auditor qualifications.
- Promoter pledge concentration.
- Other quality signals.
GSM stages range from Stage 1 to Stage 6, with increasing restrictions. Trade-to-Trade (T2T ) settlement is mandatory at higher GSM stages, eliminating intraday in those scrips.
Restrictions imposed
| Surveillance level | Typical restrictions |
|---|---|
| LT-ASM Stage 1 | 100% upfront margin; price band may tighten |
| LT-ASM Stage 2-4 | Trade-to-Trade settlement; periodic call auction |
| GSM Stage 1-3 | 100% upfront margin; tighter price bands |
| GSM Stage 4-6 | Trade-to-Trade; periodic call auction; ASM restrictions stack |
The exact restrictions depend on the stage and the exchange’s surveillance circulars.
Where to see the current ASM / GSM list
- NSE: nseindia.com > Market data > ASM / GSM lists.
- BSE: bseindia.com > Static reports > Surveillance.
- Kite: Scrips on ASM / GSM carry a surveillance tag in the marketwatch dropdown.
- Zerodha advisories: Sent via email and shown on Console when a held scrip enters ASM / GSM.
Implications for retail traders
No intraday MIS on T2T
A scrip in Trade-to-Trade (T2T ) cannot be traded intraday. Only delivery (CNC) is allowed. This is enforced via the order ticket; MIS orders are rejected.
Periodic Call Auction
For some surveilled scrips, Periodic Call Auction is the order matching mechanism. Trades match only at predefined intervals (every 30 minutes), not continuously. This reduces speculative intraday activity.
100% upfront margin
Surveilled scrips usually require 100% margin upfront for any buy, eliminating leverage on these names.
Tighter price bands
Price band restrictions tighten on surveilled scrips. A normal scrip with 20% band may drop to 5% or 2% on ASM / GSM, restricting daily price moves.
Exit constraints
If you hold a scrip that enters surveillance:
- Selling is still allowed (delivery sale).
- The tighter price band means you may not be able to exit at your preferred price.
- Buyer interest may shrink as restrictions deter participants.
For Indian retail investors, getting stuck in a surveilled scrip can be expensive due to the exit difficulty.
Why scrips end up in surveillance
| Trigger | Typical scrip profile |
|---|---|
| Rapid price spike | Mid / small-cap with low float, retail-driven momentum |
| Promoter pledge | Companies with high promoter pledge ratio |
| Earnings decline | Companies with multiple quarters of losses |
| Auditor concerns | Companies with qualified opinions or auditor changes |
| Pump-and-dump suspicion | Co-ordinated price action without fundamentals |
Scrips on multiple watchlists (penny stocks, micro-caps) are over-represented in surveillance.
How to research before trading
Before placing a trade in a mid / small-cap scrip:
- Check the NSE ASM / GSM list .
- Search the company on BSE corporate announcements for recent surveillance triggers.
- Cross-check the T2T segment list .
- Look at the delivery volume percentage for unusual activity.
This 5-minute check can save substantial pain.
See also
- Long-term ASM Stage 1 to 4
- Short-term ASM
- Trade-to-Trade segment rules
- Periodic Call Auction stocks
- Circuit filters NSE BSE
- Delivery volume percentage on the Kite marketwatch
- SEBI peak margin rules explained
- SEBI margin pledge rules September 2020
- Upfront margin requirements post-2020
- 50:50 cash collateral rule explained
- Direct payout to demat SEBI rule
- Margin trading SEBI new rules 2026
- Instant settlement T+0 stocks list
- Settlement cycle changes 2025-26
- SEBI
- National Stock Exchange
- Bombay Stock Exchange
- Kite Holdings tab explained
- Kite Positions tab explained
- How to add scrips to the Kite marketwatch
- How to use the marketwatch on Kite
- Market depth view on Kite
- Day’s change in absolute and percentage
- 52-week high and low on the marketwatch
- Penny stock (India)
- SME segment NSE BSE
- Kite (Zerodha)
- Zerodha
- Zerodha Console
External references
References
- SEBI, Additional Surveillance Measure framework, circulars dated 2018 and updated periodically.
- SEBI, Graded Surveillance Measure framework, sebi.gov.in.
- NSE India, ASM and GSM operational guidelines, nseindia.com.
- BSE India, Surveillance measures circulars, bseindia.com.