Sebi introduces GSM, stricter surveillance for stocks

Mumbai: Capital market regulator Sebi has introduced new surveillance measure to check stock price manipulation.

Sebi has decided that stocks that witness abnormal price rise not commensurate with financial health and fundamentals like Earnings, Book value, Fixed assets, Net worth, P/E multiple, etc of a company will now fall under the Under the new Graded Surveillance Measure (GSM).

Under GSM, stocks will be placed in trade to trade category and brokers and traders will have to deposit additional amount as surveillance deposit, which shall be retained for an extended period that may be reviewed weekly and monthly basis. This will be in addition to other surveillance measures including freezing of price on upper side of trading in stocks.

All the aforesaid actions will be triggered based on certain criteria that may be made effective with a very short notice, Sebi said.