For regulators hoping to rein in wild moves in small stocks like the 17-fold surge in GameStop Corp. last month, India has a system worth studying. The so-called graded surveillance measure (GSM), which was introduced in 2017, is unique and helps prevent GameStop-like surges in small caps, according to Bhargavi Zaveri, a researcher at the Mumbai-based Finance Research Group. At the first level, an order in a subject stock generates a warning about purchasing it. The severest measure allows trading in the stock only one day per month. For example, Balkrishna Paper Mills Ltd, the most recent stock added to stage 2, soon retreated about 12%.

Source: Hindustan Times February 10, 2021 09:09 UTC