Graded Surveillance Measure (GSM) - Securities Moving to Different GSM Stages

Description

BSE announces movement of 6 securities across GSM stages, with companies moving to stages I, II, and IV under the surveillance framework.

Summary

BSE has issued a circular regarding the movement of securities under the Graded Surveillance Measure (GSM) framework. Six securities are being moved to different GSM stages, with three companies moving to Stage I, one to Stage II, and two to Stage IV. The GSM framework is a market integrity measure that applies additional surveillance and trading restrictions on securities exhibiting abnormal price movements or other risk indicators.

Key Points

• 6 securities are moving to different GSM stages effective from this circular
• 3 securities moving to GSM Stage I: Bombay Talkies Ltd, Adarsh Plant Protect Ltd, and Binny Mills Ltd
• 1 security moving to GSM Stage II: Bharat Textiles & Proofing Industries Ltd
• 2 securities moving to GSM Stage IV: Neelkanth Ltd and RCI Industries & Technologies Ltd
• Securities may move to lower GSM stages if included in ESM (Enhanced Surveillance Measure) or IBC (Insolvency and Bankruptcy Code) frameworks
• Stage movements are based on NSE criteria as indicated in the circular

Regulatory Changes

The circular implements stage transitions within the existing GSM framework. Higher GSM stages typically involve stricter surveillance measures including additional margin requirements, price bands, and trading restrictions. Movement to higher stages indicates increased surveillance concerns, while the framework allows for downward movement when securities fall under ESM or IBC frameworks.

Compliance Requirements

• Trading members must ensure compliance with applicable GSM stage requirements for these securities
• Additional margin requirements and trading restrictions specific to each GSM stage must be enforced
• Market participants should be aware of the enhanced surveillance applicable to these securities
• Investors trading in these securities should understand the implications of GSM stage classifications

Important Dates

• Effective Date: October 28, 2025 (circular issuance date)
• The stage movements apply from the date of this circular

Impact Assessment

Market Impact: The movement of securities to different GSM stages will affect their liquidity and trading dynamics. Securities in higher GSM stages face additional trading restrictions and margin requirements, which typically reduce trading volumes and increase transaction costs.

Investor Impact: Investors holding or trading these securities will face stricter requirements including higher margins and potential price bands. Stage IV securities face the most stringent surveillance measures.

Operational Impact: Brokers and trading members must update their systems to reflect the new GSM stage classifications and ensure proper application of stage-specific requirements including margins, position limits, and trade reporting.

Affected Securities Details

Impact Justification

Affects trading conditions for 6 securities with varying GSM stage movements, impacting liquidity and trading parameters for these stocks