IRP stands for Integrated Risk Parameters. It is a surveillance-based risk management framework used by exchanges to identify stocks that pose a higher risk to market stability based on multiple parameters, not just price or volume, but a combination of factors including volatility, liquidity, and trading concentration.
Unlike ASM or GSM which focus primarily on price manipulation, IRP takes a broader view. A stock can be flagged under IRP even if its price movement looks normal, if the overall risk profile of the stock based on the exchange’s parameters crosses a certain threshold.
When a stock is placed under IRP, the exchange may increase the margin requirements or impose additional conditions on trading. The specific restrictions depend on the stock’s risk profile at the time of flagging.
IRP is less commonly known compared to ASM and GSM, but it operates on the same principle the exchange uses it as a tool to manage systemic risk and protect investors from stocks that carry elevated risk even if there is no obvious price manipulation happening.
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