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

Description

BSE circular announcing the movement of 10 securities into different stages of the Graded Surveillance Measure (GSM) framework for enhanced monitoring.

Summary

BSE has announced the movement of 10 securities into various stages of the Graded Surveillance Measure (GSM) framework. The securities are being moved to GSM Stages I through IV, which entails enhanced surveillance and trading restrictions based on predefined criteria such as price volatility, corporate governance issues, or compliance concerns.

Key Points

• 3 securities moving to GSM Stage I: Ador Multiproducts Ltd., Shahi Shipping Limited, Polycon International Ltd.
• 3 securities moving to GSM Stage II: Madhur Industries Ltd., Rap Corp Limited, Adishakti Loha And Ispat Limited
• 2 securities moving to GSM Stage III: Foundry Fuel Products Ltd., Aayush Wellness Limited
• 2 securities moving to GSM Stage IV: Popees Cares Limited, Progrex Ventures Limited
• Securities may move to lower GSM stages if included in ESM (Enhanced Surveillance Measure) or IBC (Insolvency and Bankruptcy Code) frameworks
• Classification is aligned with NSE standards

Regulatory Changes

The Graded Surveillance Measure (GSM) is a progressive surveillance framework where securities are placed in different stages based on specific criteria. Higher GSM stages typically involve:

• Additional disclosure requirements
• Trading restrictions (price bands, periodic call auctions)
• Increased margin requirements
• Enhanced monitoring by the exchange

Compliance Requirements

• Investors trading in these securities must be aware of applicable trading restrictions for each GSM stage -Brokers must ensure clients are informed about the GSM status of these securities
• Listed companies should maintain compliance with disclosure norms to avoid further escalation in GSM stages
• Market participants must adhere to any additional margin requirements imposed on these securities

Important Dates

• Circular Date: November 12, 2025
• Effective Date: To be implemented as per exchange directives (typically with immediate effect or T+1)

Impact Assessment

Market Impact: The movement of these securities into GSM stages signals regulatory concerns about their trading patterns or corporate governance. This typically results in reduced liquidity, wider bid-ask spreads, and potential price discovery challenges.

Investor Impact: Investors holding or trading these securities will face:

• Restricted trading conditions
• Higher transaction costs due to increased margins
• Potential difficulty in entering or exiting positions
• Need for enhanced due diligence

Operational Impact: The GSM framework serves as an early warning system for market participants and helps maintain market integrity by identifying securities with abnormal characteristics requiring closer monitoring.

Securities Details

Impact Justification

Affects trading conditions for 10 securities through GSM framework implementation; investors in these stocks face additional surveillance measures