SET vows tougher rules on short selling, trading
The Stock Exchange of Thailand (SET) intends to implement stricter regulations on short selling and trading.
The SET plans to increase the market capitalization threshold for short selling eligibility from 5 billion to 7.5 billion baht and impose triple the penalties for rule violations.
The SET is considering changes after studying international best practices, aiming to enhance market oversight and boost investor trust. These changes include setting higher standards for stock liquidity, mandating a minimum of 2% of the monthly trading volume for securities.
Under the new rules, in instances where a stock's price drops more than 10% from the previous day's closing, short sellers must set their price above the current price following the uptick rule. The SET also proposes setting a daily limit for short selling and increasing the disclosure of outstanding short sales.
In response to infractions, the SET will align its penalties with international counterparts, increasing fines for violators, with legal amendments allowing direct punishment of offenders.
For program trading, the SET wants to introduce measures to curb abnormal price volatility. This includes an intra-day dynamic price band that will temporarily halt trading if prices hit certain levels.
The SET is also developing a central system to monitor order frequency and volume, with an "auto-halt" feature for excessive trading activity. High-frequency traders will need to register for monitoring purposes.
Investors found engaging in inappropriate trading could face consequences such as credit reduction or the requirement of trading through an advisor, with their names potentially disclosed to member companies. These measures are pending a public hearing before implementation.
The SET is considering changes after studying international best practices, aiming to enhance market oversight and boost investor trust. These changes include setting higher standards for stock liquidity, mandating a minimum of 2% of the monthly trading volume for securities.
Under the new rules, in instances where a stock's price drops more than 10% from the previous day's closing, short sellers must set their price above the current price following the uptick rule. The SET also proposes setting a daily limit for short selling and increasing the disclosure of outstanding short sales.
In response to infractions, the SET will align its penalties with international counterparts, increasing fines for violators, with legal amendments allowing direct punishment of offenders.
For program trading, the SET wants to introduce measures to curb abnormal price volatility. This includes an intra-day dynamic price band that will temporarily halt trading if prices hit certain levels.
The SET is also developing a central system to monitor order frequency and volume, with an "auto-halt" feature for excessive trading activity. High-frequency traders will need to register for monitoring purposes.
Investors found engaging in inappropriate trading could face consequences such as credit reduction or the requirement of trading through an advisor, with their names potentially disclosed to member companies. These measures are pending a public hearing before implementation.
