Can ASM tackle the sudden speculative surge of SME stocks?

The Indian stock market has been engulfed by an unusual wave of speculation, with the S&P BSE SME IPO index surging from a modest 1,400 points in September 2020 to a staggering 35,000 points in September 2023. This has raised concerns with the Securities and Exchange Board of India (SEBI), prompting it to take decisive action. On September 25, 2023, it rolled out the Additional Surveillance Measure (ASM) and Trade-to-Trade (T2T) settlement to regulate the sudden price inflation among SME stocks. What is Additional Surveillance Measure (ASM)? The ASM mechanism aims to control the extreme volatilities in the market. It acts as a safety net for stocks and prevents deceitful price movements and excessive price speculation. By introducing ASM as part of the S&P BSE index, SEBI's objective is to regulate the excessive rise in SMEs' share value due to alleged speculation and market manipulation. Protection for retail investors Over a deca