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

Description

BSE announces movement of 13 securities into various stages of the Graded Surveillance Measure (GSM) framework for enhanced monitoring.

Summary

BSE has issued a circular announcing the movement of 13 securities into various stages of the Graded Surveillance Measure (GSM) framework. The GSM is a risk management mechanism that places securities under enhanced surveillance based on specific criteria. Eight securities are being moved to GSM Stage I, four to Stage II, and one to Stage III. This action indicates increased monitoring and potential trading restrictions for these securities.

Key Points

• 8 securities moving to GSM Stage I: Ganon Products Limited, Mfs Intercorp Ltd., Polo Hotels Ltd., RSC International Ltd., Mega Fin (India) Ltd., Noida Toll Bridge Company Ltd., Yaan Enterprises Limited, and Shashank Traders Limited
• 4 securities moving to GSM Stage II: Mathew Easow Research Securities, JMG Corporation Ltd., Sparkle Gold Rock Limited, and Kashyap Tele-Medicines Limited
• 1 security moving to GSM Stage III: Woodsvilla Ltd.
• Securities may move to lower GSM stages if included in ESM (Enhanced Surveillance Measure) or IBC (Insolvency and Bankruptcy Code) frameworks
• Movement is aligned with NSE’s GSM framework

Regulatory Changes

The Graded Surveillance Measure framework applies progressive surveillance stages with increasing restrictions:

• Stage I: Initial surveillance with additional disclosure requirements and price bands
• Stage II: Enhanced surveillance with stricter trading restrictions and periodic call auctions
• Stage III: Highest surveillance level with severe trading restrictions, 100% upfront margin requirements, and limited trading windows

Securities can move between stages based on compliance with surveillance criteria or inclusion in other regulatory frameworks (ESM or IBC).

Compliance Requirements

• Investors: Must comply with additional margin requirements and trading restrictions applicable to the GSM stage
• Trading Members: Need to inform clients about the GSM classification and associated restrictions
• Listed Companies: Subject to enhanced disclosure and compliance monitoring requirements
• Market Participants: Must be aware of limited liquidity and increased volatility in GSM securities

Important Dates

• Circular Date: December 10, 2025
• Effective Date: To be implemented as per BSE’s surveillance schedule (specific effective date not mentioned in the circular)

Impact Assessment

Market Impact: High impact on the 13 affected securities with expected reduction in liquidity and trading volumes. Investors may face difficulty in executing trades, particularly for Stage III securities.

Investor Impact: Existing shareholders will face:

• Reduced liquidity and potential difficulty in exiting positions
• Increased margin requirements for trading
• Higher volatility due to limited trading windows
• Potential negative sentiment affecting stock prices

Operational Impact: Brokers and trading members must update their systems to reflect GSM restrictions and ensure compliance with additional margin and trading requirements for these securities.

Securities Details

Impact Justification

Affects 13 securities with increased surveillance measures that will impact trading and liquidity for these stocks. Important for investors holding these securities to understand enhanced monitoring implications.