Graded Surveillance Measure (GSM) - Securities Moving into GSM Stages

Description

BSE announces movement of 7 securities into various GSM stages, including 4 securities moving to Stage I, 1 to Stage II, and 2 to Stage III under the Graded Surveillance Measure framework.

Summary

BSE has announced the movement of 7 securities into various stages of the Graded Surveillance Measure (GSM) framework effective from the date of this circular. The GSM framework is designed to enhance market surveillance and protect investor interests by placing additional monitoring and trading restrictions on securities that exhibit abnormal price movements or other concerning characteristics.

Key Points

• 4 securities are moving to GSM Stage I: Hemo Organic Limited, Suncity Synthetics Ltd., Indergiri Finance Ltd., and B.C. Power Controls Ltd
• 1 security is moving to GSM Stage II: Span Divergent Limited
• 2 securities are moving to GSM Stage III: Mehta Securities Ltd. and Adjia Technologies Limited
• Securities marked with (#) can move to lower GSM stages if included in ESM Framework
• Securities marked with ($) can move to lower GSM stages if included in IBC Framework
• Some classifications are as per NSE marked with (*)

Regulatory Changes

The circular implements stage-wise surveillance measures under the GSM framework. Each stage typically involves progressively stricter trading restrictions such as:

• Stage I: Initial surveillance with possible price band restrictions
• Stage II: Enhanced surveillance with additional disclosure requirements
• Stage III: Highest level of surveillance with stricter trading limits

Securities can be moved to lower GSM stages if they are included in the Enhanced Surveillance Measure (ESM) or Insolvency and Bankruptcy Code (IBC) frameworks.

Compliance Requirements

• Market participants should note the GSM stage classification of these securities
• Traders must comply with applicable trading restrictions for each GSM stage
• Additional margin requirements and position limits may apply based on GSM stage
• Investors should exercise enhanced due diligence when trading these securities

Important Dates

• Effective Date: November 17, 2025 (date of circular issuance)

Impact Assessment

Market Impact: The movement of these securities into various GSM stages will result in reduced liquidity and potentially lower trading volumes. Higher GSM stages typically involve stricter price bands, higher margin requirements, and limited participation from certain categories of traders.

Investor Impact: Existing shareholders of these securities may experience reduced liquidity for exits. The GSM classification serves as a warning signal about potential concerns regarding these securities, requiring investors to exercise heightened caution.

Trading Impact: Stage III securities (Mehta Securities and Adjia Technologies) will face the most stringent trading restrictions, while Stage I securities will have relatively lighter surveillance measures. All affected securities may see reduced institutional and algorithmic trading participation.

Affected Securities Details

Impact Justification

Movement into GSM stages affects trading liquidity and indicates increased regulatory scrutiny for these securities, impacting shareholders and traders of these specific stocks