Norms to move stocks under additional surveillance mechanism get stricter

The new rules also consider a stock's valuation-price to earnings ratio, client concentration and gyration in the stock price over a period of one month and one year

In a bid to further improve the risk management system, the Securities and Exchange Board of India (Sebi) and bourses have tightened rules for putting stocks under the ‘additional surveillance mechanism’.

The new rules also consider a stock’s valuation, price to earnings ratio, client concentration and gyration in the price, over a period of one month and one year.

Market experts said the new criteria could result in ASM being imposed in more stocks. Stocks under ASM are allowed to trade only in a five per cent band and leveraging is barred. A few weeks ago, the NSE and BSE had moved