ASM Full Form is Additional Surveillance Measure. To bolster market integrity and protect investor interests, SEBI, and stock exchanges have introduced proactive surveillance measures like narrowing price bands, periodic call auctions, and shifting securities to the Trade for Trade segment. Building upon these measures, they have jointly decided to implement Additional Surveillance Measures (ASM) on securities with surveillance concerns, focusing on objective factors like price and volume fluctuations, as well as volatility.
Purpose for the introduction of ASM framework
The ASM framework introduced by SEBI and stock exchanges serves key purposes:
- Enhances Market Integrity: Identifies securities with surveillance concerns to prevent market manipulation.
- Safeguards Investor Interests: Alerts investors to exercise caution with these securities.
- Encourages Due Diligence: Advises market participants to conduct thorough due diligence, promoting responsible trading practices.
Criteria for shortlisting scrips under ASM framework
The shortlisting of securities under ASM is based on objective criteria jointly decided by SEBI and stock exchanges. These criteria typically include dynamic market parameters such as:
- High-Low Variation: The extent to which a security’s price fluctuates between its daily high and low prices.
- Client Concentration: The degree to which a particular group of clients or investors holds a significant portion of the security’s shares.
- Close-to-Close Price Variation: The variation in a security’s closing price from one trading day to the next.
- Market Capitalization: The total market value of a company’s outstanding shares.
- Volume Variation: The variation in trading volume for the security.
- Delivery Percentage: The percentage of shares that are physically delivered during transactions.
- No. of Unique PANs: The number of unique Permanent Account Numbers (PANs) associated with the security’s trading.
- PE (Price-Earnings) Ratio: This ratio may also be considered to assess the valuation of the security.
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