ASM in Indian Stock Markets

ASM is designed to foster market integrity, protect retail investors from undue risks, and prevent speculative excesses or manipulative practices. It ensures fair and orderly trading by curbing leverage and restricting high-risk activities in vulnerable stocks. Key reasons for imposition include:

• High Volatility or Price Movements: Stocks showing sharp, unexplained price swings (e.g., close-to-close variation >20% over a period) without supporting fundamentals.
• Abnormal Trading Activity: Unusual volume surges, low delivery percentages, or high client concentration (e.g., trades dominated by a few participants).
• Structural Vulnerabilities: Low market capitalization, high price-to-earnings (P/E) ratios, or limited unique investor participation (e.g., fewer unique PANs).
• Other Triggers: Frequent price band hits or high-low price variations exceeding benchmarks.