Graded Surveillance Measure
An exchange framework applying escalating restrictions to securities with weak fundamentals or unusual price behaviour.
How it is identified
Test: the security meets criteria on net worth, net income, price-to-earnings, market capitalisation or price movement, placing it in one of six stages
Unit
qualitative
In depth
GSM stages escalate from a periodic call auction with 100% margin at the lower stages to trading permitted only once a week with a fixed price band at the highest — restrictions severe enough that the security becomes effectively untradable. Unlike ASM, the GSM criteria include fundamental measures such as net worth and earnings, so it targets companies whose prices have detached from any financial basis. A stock in higher GSM stages cannot be exited on demand at any price, which converts a paper loss into a trapped position. The stage list is published by the exchanges and is checkable before buying.
Worked example
A stock in a higher GSM stage trades only in a weekly call auction with a 5% band. A holder wanting out has one opportunity a week, at a price set by whoever else shows up.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Graded Surveillance Measure” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.