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Why is Buying Restricted for GSM Stage 2 and Above Stocks?

By: Akriti Tomar | Date : Dec 7, 24

Introduction

Stocks in GSM Stage 2 or higher are subject to strict regulatory measures to safeguard market integrity and reduce speculative trading risks. The primary reasons for buying restrictions include:
  1. Mandatory Additional Surveillance Deposit (ASD):
    • Buyers must deposit an ASD of 100% (or more) of the trade value.
    • This deposit remains locked by the exchange for a minimum period of two months, even after the stock is sold.
  2. Risk Mitigation:
    • GSM Stage 2 and above stocks are often high-risk due to their volatility and potential for price manipulation. The restrictions help minimize exposure to such risks and protect investor interests.

Selling Allowed for Existing Holdings

While fresh purchases are restricted, investors holding stocks in GSM Stage 2 or higher can still sell them as per regulatory guidelines.

Learn More

To better understand the GSM framework, refer to What does GSM mean? For the latest updates, visit the NSE GSM Report (WEB) or BSE GSM Report (WEB).

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