The Stock Exchange of Thailand (SET) has announced plans to implement stricter regulations on short selling and high-frequency trading (HFT) in response to recent market volatility and declining investor confidence.

SET President Asadej Kongsiri stated that these measures are designed to mitigate excessive price fluctuations and enhance market stability.

Under the proposed regulations, short selling and HFT activities will be restricted to securities included in the SET100 Index.

This marks a change from previous rules that allowed short selling of non-SET100 securities, provided they met specific market capitalization and liquidity criteria.

Additionally, the SET plans to enforce mandatory registration for investors engaging in HFT to improve oversight and ensure stricter regulation.

These measures are expected to be implemented in the second quarter of 2025, following a public hearing and approval from the Securities and Exchange Commission (SEC).

The SET Index has experienced a decline of approximately 10% since the beginning of 2025, positioning it as one of the worst-performing major global indices.

Analysts have adjusted their year-end targets for the SET Index, citing continued foreign capital outflows and political uncertainties as primary concerns.

In response to these challenges, the SET aims to implement these regulatory changes to stabilize the market and restore investor confidence.

In addition to the new restrictions, the SET has indicated plans to increase fines for violations of short selling rules, aligning with practices observed in leading international stock exchanges.

The exchange also intends to enhance the supervision of program trading to prevent abnormal price fluctuations.

These initiatives are part of a broader effort to strengthen market oversight and ensure a fair trading environment for all participants.

The SET will conduct a public hearing to gather feedback on the proposed regulations before seeking approval from the SEC.

The tighter controls are anticipated to take effect in the second quarter of 2025, as the exchange continues its efforts to enhance market stability and investor confidence.