The Additional Surveillance Measure (ASM) is a regulatory mechanism implemented by stock exchanges, in coordination with the Securities and Exchange Board of India (SEBI), to monitor securities exhibiting unusual trading patterns.
The primary objective of ASM is to alert investors and market participants about potential risks while ensuring greater market transparency and stability.
Why is ASM Implemented?
Stocks placed under ASM require traders and investors to exercise additional due diligence before executing transactions. These measures act as a cautionary signal rather than a trading restriction, helping investors make informed decisions.
Criteria for ASM Shortlisting
SEBI and stock exchanges use a predefined set of objective parameters to identify securities for ASM. The key factors considered include:
1) High-Low Price Variation
2) Client Concentration
3) Close-to-Close Price Variation
4) Market Capitalization
5) Volume Variation
6) Delivery Percentage
7) Number of Unique PANs
While inclusion under ASM does not imply any wrongdoing by the company, it serves as a regulatory tool for surveillance.
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