ASM (Additional Surveillance Measure) is a regulatory framework introduced by SEBI and stock exchanges in March 2018 to monitor securities showing unusual price movements, volume spikes, or concentrated trading patterns. 

ASM is not a judgment on company fundamentals; it is a surveillance mechanism that imposes trading restrictions, including 100% margin requirements, price band compression, and delivery-only settlement. As of March 19, 2026, there are 69 securities on the long-term ASM list and 25 on the short-term list. 

This guide covers why ASM was introduced, how stocks enter and exit the framework, the four escalating stages, and what ASM means for retail investors.

#What is ASM in the Indian Stock Market?

ASM stands for Additional Surveillance Measure, a monitoring and risk-control framework operated jointly by SEBI and stock exchanges (NSE, BSE, MSE). ASM is not a settlement mechanism and has no relation to trade settlement cycles.

Per NSE's official documentation: "SEBI and Exchanges have decided that there shall be Additional Surveillance Measures on securities with surveillance concerns based on objective parameters viz. Price / Volume variation, Volatility, etc."

The framework came into effect on March 26, 2018, following joint surveillance meetings between SEBI and exchanges. ASM operates alongside other surveillance tools, including GSM (Graded Surveillance Measure), price band reductions, periodic call auctions, and Trade-to-Trade transfers.

ASM placement does not imply that a stock is being manipulated or that the company has fundamental problems. Per the NSE FAQ: "The shortlisting of securities under ASM is purely on account of market surveillance and it should not be construed as an adverse action against the concerned company/entity."

#Why Was ASM Introduced?

SEBI and exchanges introduced ASM to achieve three specific goals:

1. #Alert investors to exercise extra caution when dealing in securities showing abnormal trading patterns
2. #Advise market participants to carry out due diligence before trading in identified securities
3. #Enhance market integrity and safeguard investor interests

The framework fits within SEBI's broader surveillance ecosystem. Higher margin requirements discourage leveraged speculative trading. Trade-to-trade settlement and price band compression make pump-and-dump schemes harder to execute. Flagging securities with unusual volume or price patterns gives retail investors advance warning before they enter volatile positions.

Before ASM, existing tools, price bands, periodic auctions, and T2T transfers were insufficient to address the growing complexity of market manipulation and speculation in mid-cap and small-cap stocks. The framework emerged from joint surveillance discussions between SEBI and exchanges as an additional layer of protection.

#How Does a Stock Get Placed Under ASM?

Securities are shortlisted based on eight market-based dynamic parameters, jointly decided by SEBI and exchanges:

A stock needs to satisfy #any one of the defined criteria combinations to enter the long-term ASM framework. The criteria combine multiple parameters; for example, one entry criterion requires high-low variation above 150% in 3 months, plus top-25 client concentration above 25%, plus market cap above ₹100 crore.

A beta adjustment is applied when the broader market itself is rising, ensuring that normal bull market movements are not penalised. The criteria are reviewed and updated during regular joint surveillance meetings between SEBI and exchanges, with NSE and BSE implementing restrictions in a coordinated manner.

#What Are the Types and Stages of ASM?

#Long-Term ASM: Four Escalating Stages

Long-term ASM targets securities with sustained abnormal behaviour over weeks to months. Restrictions escalate progressively if the unusual trading patterns persist:

Stages are risk escalation levels, not company quality ratings. A stock moving from Stage I to Stage IV means its abnormal trading behaviour has persisted despite initial restrictions; it says nothing about the company's business fundamentals.

Stocks meeting certain extreme criteria (such as 200%+ close-to-close variation in 365 days combined with 300%+ high-low variation and market cap above ₹1,000 crore) go directly to Stage IV and must remain there for a minimum of 90 calendar days before becoming eligible for stage-by-stage review.

Stocks with low non-promoter holding (below 25%) combined with high price variation are also automatically placed in Stage IV.

#Short-Term ASM: Two Stages

Short-term ASM addresses sudden, rapid price movements:

Short-term ASM catches rapid movements using three criteria: 5-day close-to-close variation above 25% (beta-adjusted) with 30%+ client concentration, 15-day variation above 40% with 30%+ concentration, or 1-month high-low variation above 75% with low unique trader count.

Short-term ASM was extended to derivative stocks and their F&O contracts from April 2022, and to SME stocks from September 2023.

#Movement Between Frameworks

A stock can start in short-term ASM and later be moved to long-term ASM if it continues meeting criteria. Once in long-term ASM, short-term provisions no longer apply. Stocks can also exit ASM entirely once volatility normalises.

#Should Retail Investors Trade ASM Stocks?

#Practical Trading Restrictions

When a stock is under ASM:

• #Intraday trading is not allowed: Only delivery-based (CNC) orders are permitted. MIS, CO, and BO product types are blocked by brokers.
• #100% margin is required: No leverage whatsoever. The full trade value must be paid upfront.
• #Price bands are compressed: Daily price movement is restricted to 5% or lower at advanced stages, limiting both upside and downside per session.
• #Stocks cannot be pledged: ASM stocks cannot be used as collateral for margin loans. If a pledged stock enters ASM, collateral margins are withdrawn.
• #Corporate actions are unaffected: Dividends, bonuses, and stock splits continue to apply normally.

#Investor Suitability

#Key Risk Factors

#Liquidity risk: ASM restrictions deter speculative traders, reducing trading volumes and liquidity. Selling at desired prices can become difficult during periods of low participation.

#Negative sentiment: The ASM label creates a negative bias in the market, potentially causing additional price decline from selling pressure by investors reacting to the surveillance flag itself, separate from any fundamental issue.

#Exit difficulty: Compressed price bands (5% or lower at Stage IV) mean that even if an investor wants to sell, the stock may hit its lower circuit before the order is filled.

#Which Stocks Are Currently Under ASM?

ASM lists are dynamic; stocks are added and removed based on periodic reviews. The data below is illustrative. Always verify the current list on the NSE ASM reports page or the BSE website before making investment decisions.

#Long-Term ASM: Notable Stocks (As of March 19, 2026)

The NSE long-term ASM list includes 69 securities. Selected names:

#Short-Term ASM: Notable Stocks (As of March 19, 2026)

The NSE short-term ASM list includes 25 securities. Selected names:

ASM lists are reviewed weekly (long-term) and every 5-15 trading days (short-term). The stocks listed above may no longer be under ASM at the time of reading. Verify current status on the NSE or BSE website.

#How Does a Stock Exit ASM?

#Long-Term ASM Exit

Securities must complete 90 calendar days in the long-term ASM framework before becoming eligible for exit. The process is gradual, one stage at a time:

• Stage IV → Stage III (if Stage IV criteria are no longer met)
• Stage III → Stage II (if Stage III criteria are no longer met)
• Stage II → Stage I (if Stage II criteria are no longer met)
• Stage I → Full exit from ASM (if entry criteria are no longer met)

#Short-Term ASM Exit

If a stock does not meet entry criteria on the review date (from the 6th or 16th trading day onward, depending on the criterion), it is removed from the short-term ASM framework.

#Review Cadence

• #Long-term ASM: Stage-wise review conducted weekly
• #Short-term ASM: Review eligibility from the 6th or 16th trading day
• #ASM/GSM lists are reviewed monthly as of 2025 (updated from quarterly), allowing faster regulatory response to unusual trading behaviour

#What is the Difference Between ASM and GSM?

ASM and GSM are separate frameworks. Securities already under GSM are excluded from the ASM shortlisting process.

#Securities Excluded From Long-Term ASM

• Securities already under GSM
• Securities already under Trade-for-Trade settlement

Trading in ASM-listed stocks requires careful monitoring, disciplined investing, and timely market insights. SMC helps investors stay informed with research-backed analysis and seamless access to equity markets. Open your Demat account with us to invest with greater confidence.