To safeguard the interest of investors, one of the initiatives taken by the market regulator SEBI (Securities and Exchange Board of India) is a framework named ASM (Additional Surveillance Measure).

Based on the predetermined conditions, stocks will be placed under this framework. The criteria used for shortlisting stocks are High-Low Variation, client concentration, close to close price variation, market capitalisation, volume variation, delivery percentage, number of unique PANs, and PE of the stock.

Once the stock goes under ASM, it can result in restrictions like limitation in intraday movement and, importantly, higher margin requirements. For instance, even if the exchange stipulated margin is 20 per cent for a stock, if it falls into this surveillance measure, margin requirement can go to 100 per cent or in some cases, it can even go up to 200 per cent. This will be relaxed in stages based on preset conditions.

In essence, no intraday leverage can be availed for the stocks that are moved to the ASM category. Besides, you will not be able to pledge the stock once it is placed under this framework. If you have already pledged a stock and then it goes under ASM, the margins provided by taking this as collateral will be cut to the extent it was provided against the holdings of that particular stock.

Sometimes, if certain conditions are met, the stocks are further moved to trade-to-trade (T2T) category. Intraday trades are not allowed in these securities, and all buy and sell transactions are compulsory delivery. So, you can only sell the stock after it is credited to your demat and not before that.

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