The Additional Surveillance Measure (ASM) framework is a regulatory tool introduced by SEBI and Indian stock exchanges to enhance market integrity and protect investors from excessive volatility and speculative trading. Stocks placed under ASM are subject to tighter trading restrictions, such as higher margin requirements and limits on intraday leverage, to curb abnormal price movements and potential manipulation.
Criteria for Inclusion in ASM
Stocks are evaluated and placed under ASM based on several quantitative and qualitative criteria, including:
- High-low price variation over a specified period
- Unusual trading volumes
- Concentration of trades among top clients
- Frequent price band breaches (i.e., hitting upper or lower circuit limits)
- Other market surveillance parameters, as determined by exchanges
Both long-term and short-term ASM frameworks exist, and stocks can be moved in and out of ASM as their trading patterns evolve.
ASM (Additional Surveillance Measure) Stage 1
When a stock is placed under Stage 1 of the ASM framework:
- 100% margin requirement: Investors must provide the full value of the trade as margin, starting from the T+3 day (i.e., three trading days after inclusion).
- No intraday leverage: Traders cannot use margin or leverage for intraday trades in these stocks.
- Staged exit: Stocks are eligible for a staged exit from ASM after 90 calendar days, subject to review.
- Trading allowed: Buying and selling are still permitted, but with the above restrictions.
These measures are intended to discourage speculative activity and force investors to exercise greater caution.
Here is the list of stocks that have been included in ASM Stage 1 this month:
BSE Ltd
BSE (formerly Bombay Stock Exchange) is Asia’s oldest stock exchange and one of the largest in India. It provides a transparent and efficient platform for trading in equities, currencies, debt instruments, and mutual funds. On June 11th, BSE Ltd was placed under ASM Stage 1 by the stock exchanges.
Cochin Shipyard Ltd
Cochin Shipyard is one of the leading shipbuilding and maintenance facilities in India. It primarily serves commercial and defense sectors with shipbuilding, ship repair, and marine engineering services. On June 9th, BSE Ltd was placed under ASM Stage 1 by the stock exchanges.
Data Patterns (India) Ltd
Data Patterns is a defense and aerospace electronics company engaged in the design, development, and production of mission-critical systems. It caters mainly to Indian defense organizations. On June 6th, BSE Ltd was placed under ASM Stage 1 by the stock exchanges.
Sika Interplant Systems Ltd
Sika Interplant is a supplier of advanced engineering systems, subsystems, and components for aerospace and defense. It is known for its precision manufacturing capabilities. On June 4th, BSE Ltd was placed under ASM Stage 1 by the stock exchanges.
Mangalore Chemicals & Fertilizers Ltd
Mangalore Chemicals is a key fertilizer producer in South India. The company manufactures a wide range of fertilizers, including urea and phosphatic products. On June 4th, BSE Ltd was placed under ASM Stage 1 by the stock exchanges.
Afcom Holdings Ltd
Afcom Holdings Limited is a Chennai-based international cargo airline. The company operates airport-to-airport cargo transport, specializing in a range of logistics solutions across ASEAN countries. On June 2nd, BSE Ltd was placed under ASM Stage 1 by the stock exchanges.
Written by Sridhar J
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