Additional Surveillance measure (ASM) is a regulatory mechanism introduced by the Securities Exchange Board Of India (SEBI) to control and monitor trading activities. ASM is designed to manage risk, improve the market integrity, and protect the investor. This framework includes several predefined criteria, such as price volatility, market capitalisation, and trading volumes. ASM majorly aims to maintain market stability by manipulating and regulating trading activities. Investors must know the stock’s ASM status before making valuable investment decisions.
SEBI introduces Additional Surveillance measures (ASM) to enhance the market integrity and protect the interests of the investors. Certain preventative surveillance measures like price distortion, transfer of securities, and periodic call auctions are done to trade for trade segments. SEBI listed many stocks under the ASM list; many of them are volatile and risky stocks.
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The stocks are moved to the ASM list based on NSE FAQ criteria. Stocks under ASM have been broadly divided into short-term ASM and long-term ASM stocks. To know which stocks are mentioned under the ASM list.
Additional surveillance measures are of many types. Some of the common types are:
The price band ASM list helps to prevent high volatility and sudden price variations. This is done by placing price limits on the securities within a specified range.
High-margin requirements are imposed on certain securities to reduce the risk of price manipulation and speculative activities.
In the GSM list, securities are classified as per the risk profile. This enables targeted monitoring and regulations.
Some ASM securities must provide additional information and disclosures to investors so that transparency is maintained in the market.
ASM restricts some securities trading activities to prevent excessive speculation. Restrictions like limitations on intraday trading and short selling help to maintain market stability.
Following are the surveillance actions applicable to the stocks listed under ASM:-
The stocks in the ASM list are shortlisted as per the objective criteria of SEBI and exchanges. The decision to include a stock in this list is based on the following parameters:
ASM holds great importance in regulating and monitoring trading activities. High volatile and risky stocks are included in the ASM list. This listing indicates to the investors the potential risk associated with those stocks. This way, ASM helps to improve market integrity, manage risks, and save the interest of potential investors. When an investor comes across their stock in the ASM list, they should carefully evaluate the reason behind its listing and conduct thorough research on the stock.