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

Description

BSE announces movement of 8 securities across different GSM stages (I, II, III, and IV) under the Graded Surveillance Measure framework.

Summary

BSE has announced the movement of 8 securities into their respective Graded Surveillance Measure (GSM) stages. The circular lists companies moving to GSM Stage I (2 securities), Stage II (2 securities), Stage III (1 security), and Stage IV (3 securities). Higher GSM stages typically impose stricter trading restrictions and surveillance measures.

Key Points

• 2 securities moving to GSM Stage I: Adline Chem Lab Limited and Alan Scott Enterprises Limited
• 2 securities moving to GSM Stage II: Sungold Capital Ltd. and Minolta Finance Ltd.
• 1 security moving to GSM Stage III: Caprolactam Chemicals Ltd.
• 3 securities moving to GSM Stage IV: Softbpo Global Services Ltd., Charms Industries Ltd., and Hari Govind International Ltd.
• Securities may move to lower GSM stages if included in ESM Framework (marked #) or IBC Framework (marked $)
• Some classifications aligned with NSE standards (marked *)

Regulatory Changes

The GSM framework involves progressive surveillance stages with increasing restrictions:

• Stage I: Initial surveillance with enhanced monitoring
• Stage II: Additional disclosure requirements and trading restrictions
• Stage III: Further tightened surveillance measures
• Stage IV: Most stringent surveillance with maximum trading restrictions

Movement to higher stages indicates concerns about price volatility, corporate governance, or compliance issues.

Compliance Requirements

• Investors trading in these securities must be aware of applicable GSM restrictions at each stage
• Trading members must ensure compliance with GSM-specific margin requirements and position limits
• Additional surveillance margin and trade-to-trade settlement may apply depending on GSM stage
• Enhanced disclosure and due diligence requirements for transactions in GSM securities

Important Dates

• Circular Date: January 27, 2026
• Effective Date: As per BSE surveillance framework (typically immediate or next trading session)

Impact Assessment

Market Impact: High - Securities moving to higher GSM stages face reduced liquidity, higher transaction costs, and limited investor participation. Stage IV represents the highest level of surveillance with maximum restrictions.

Investor Impact: Investors holding these securities may experience difficulties in exiting positions due to trade-to-trade settlement requirements and reduced market participation. Additional margins may be required.

Operational Impact: Brokers and trading members must update their risk management systems to reflect the new GSM classifications and ensure appropriate margin collection and position monitoring.

Securities Details

Impact Justification

Movement to higher GSM stages indicates increased surveillance and trading restrictions for affected securities, directly impacting liquidity and investor participation.