The full form of ASM in the context of the stock market is “Additional Surveillance Measure.” Stock exchanges employ this measure to closely monitor the trading activities of particular securities that exhibit atypical market behaviors or excessive volatility.
The objective of ASM is to ensure that investors are protected from turbulent price movements and to maintain the overall integrity of the market.
- What is ASM in Share Market?
- How Does ASM Work?
- ASM Framework – ASM Stages
- Difference Between ASM And GSM
- Types of ASM List
- List of ASM Stocks
- What is ASM? – Quick Summary
- Asm Full Form – FAQs
What is ASM in Share Market?
Additional Surveillance Measure (ASM) is a framework set by stock exchanges to monitor and review the trading activities of particular securities closely. The initiative safeguards investors from extreme price volatility due to market manipulation or other unscrupulous activities.
Under ASM, securities exhibiting abnormal price movements or inconsistent trading patterns are placed under enhanced surveillance to provide a safer and more transparent trading environment.
For instance, consider a scenario where a particular stock exhibits a sudden spike in trading volume and price without any substantial change in the company’s fundamentals or market conditions.
Such abnormal behavior can trigger the stock to be placed under ASM. Once under ASM, there are certain restrictions and closer monitoring applied to the trading of this stock to curb any manipulative activities and protect the interests of investors.
How Does ASM Work?
The ASM framework operates by identifying securities that display abnormal trading behaviors and placing them under closer watch.
This process involves several steps:
- Identification: Stocks showing unusual price or volume movements are identified based on predefined criteria.
- Listing: Identified stocks are listed under the ASM category, notifying investors about the enhanced surveillance.
- Monitoring: Continuous monitoring of the trading activities of the listed securities is conducted to detect any manipulative practices.
- Review: Periodic reviews are carried out to decide whether to continue or remove the securities from the ASM list.
- Reporting: Regular reporting to the concerned regulatory authorities is done to ensure compliance and take necessary actions if required.
ASM Framework – ASM Stages
The ASM framework is structured into different stages, each with its surveillance actions. This systematic approach helps in managing the securities under surveillance effectively:
Stage 1: Initial identification and listing of securities under ASM based on predefined criteria.
Stage 2: Enhanced monitoring and imposition of certain trading restrictions to curb manipulative activities.
Stage 3: Further restrictions and closer scrutiny if the abnormal behavior continues.
Stage 4: Review and possible delisting from ASM if the security’s trading behavior normalizes.
Difference Between ASM And GSM
The primary distinction between Additional Surveillance Measure (ASM) and Graded Surveillance Measure (GSM) is that while ASM is directed towards monitoring specific securities showing abnormal trading patterns, GSM has a broader scope and is designed to tackle market-wide manipulative practices.
|Parameter||ASM (Additional Surveillance Measure)||GSM (Graded Surveillance Measure)|
|Focus||Targets specific securities in the market.||Encompasses a market-wide approach.|
|Objective||Aims at curbing abnormal trading behaviors.||Strives to tackle manipulative trading practices.|
|Scope||Has a narrower scope focused on listed securities.||Boasts a broader scope across the market.|
|Listing||Based on certain predefined criteria.||Utilizes a graded structure for listing.|
|Monitoring||Enhanced surveillance on identified securities.||General surveillance across the market.|
|Restrictions||Explicitly applied to listed securities.||Vary based on the assigned surveillance grade.|
|Review||Reviewed periodically to ensure effectiveness.||Reviewed based on prevailing market conditions.|
Types of ASM List
ASM framework typically comprises two major lists based on the level of surveillance required:
- List 1: Securities that initially meet the criteria for enhanced surveillance are placed in this list.
- List 2: Securities that continue to exhibit abnormal trading behaviors despite being under surveillance are escalated to this list for stricter monitoring.
In the initial phase, securities identified for abnormal behavior are placed in List 1 and subjected to certain trading restrictions and closer monitoring. If the unusual trading pattern continues, they are moved to List 2 for further scrutiny, where stricter measures are employed to ensure market integrity and protect investors.
List of ASM Stocks
|Company Name||ASM Date||Market Cap(Cr)||Current Price||Price Change||Price % Change|
|Suzlon Energy (Nse)||28-Oct-2023||43,637.58||32.10||0.70||2.23|
|Kalyan Jewellers India||28-Oct-2023||29,608.87||287.45||1.55||0.54|
|Kaynes Technology India||28-Oct-2023||13,833.44||2,379.25||87.70||3.83|
|Himadri Speciality Chemical||28-Oct-2023||10,505.55||238.75||4.60||1.96|
What is ASM? – Quick Summary
- The full form of ASM is the Additional Surveillance Measure, a regulatory framework in the Indian stock market aimed at monitoring and reviewing the trading of stocks showing abnormal behavior to ensure market integrity.
- ASM in the Share Market is applied to specific securities that exhibit excessive volatility or other unusual market behaviors to maintain a fair and transparent market environment.
- The working of ASM involves identifying such securities, categorizing them based on certain criteria, and imposing certain restrictions to curb speculative trading and manipulative activities.
- The ASM framework comprises various stages, each with its own set of surveillance actions, that help in close monitoring and controlling of the trading of the identified securities.
- The key difference between Additional Surveillance Measure (ASM) and Graded Surveillance Measure (GSM) is that ASM specifically targets and tracks securities that exhibit unusual trading activities, whereas GSM encompasses a wider range of surveillance, aiming to address manipulative practices that may affect the entire market.
- There are two types of ASM lists, Trade for Trade and Price Band, each carrying different implications and restrictions on the trading of the listed securities.
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Asm Full Form – FAQs
What Is ASM In The Share Market?
Additional Surveillance Measure (ASM) in the Share Market is a mechanism implemented by stock exchanges under the guidance of SEBI. It monitors securities with abnormal price movements or high speculative interests to keep the market fair and transparent for investors.
Is it safe to buy ASM stocks?
Investing in stocks listed under ASM can be risky as they are under enhanced surveillance due to abnormal market behaviors or excessive volatility. However, an informed and cautious investor with a thorough understanding of the risks and a long-term investment horizon may consider investing in such stocks.
Can we buy ASM listed stock?
Yes, investors can buy stocks listed under ASM, but they should be aware of the added surveillance and the possible reasons behind a stock being placed under ASM. There might be higher margins and trade restrictions, which could affect the liquidity and pricing of the stock.
How many days a stock stays in ASM list?
The stock’s duration on the ASM list varies and is determined by the stock exchanges based on the stock’s performance and compliance with the regulatory norms. The exchanges review the list periodically, and stocks may be moved in or out of the ASM list based on their review.
How many shares are there in ASM?
The number of shares under ASM can vary over time as stocks are added to or removed from the ASM list based on their market behavior and regulatory compliance.