The Stock Exchange of Thailand (SET) has received a comprehensive case study from an international financial consultancy firm, which has highlighted that the regulatory framework governing ‘short selling’ and ‘program trading’ in the Thai stock market is on par with that of peer exchanges.
In response, the SET plans to bolster its oversight of short selling and program trading to mitigate their influence on market prices and liquidity. This will involve providing more detailed public reports on these practices to aid investors in making well-informed decisions. Additionally, closer collaboration with regulatory agencies is envisaged to refine regulations and assign clearer responsibilities for improved oversight and the swift imposition of penalties on violators.
SET’s President, Pakorn Peetathawatchai, has put forward measures to fortify oversight in these realms. These may encompass implementing additional mechanisms to manage the impact on prices and liquidity, disclosing more detailed public reports on short selling and program trading, establishing processes for data verification, and imposing penalties on offenders. Collaboration with regulatory agencies for adjusting regulations and defining responsibilities more clearly is part of the plan. The specifics of these measures will be unveiled after consultation with the regulatory bodies.
To ensure equitable and transparent trading practices, the SET has instituted various rules and regulations. Nonetheless, concerns have surfaced in recent years regarding potential market manipulation and insider trading, prompting the SET to ramp up its oversight capabilities in trading.
The SET has enhanced its market surveillance system to identify abnormal trading patterns, price manipulation, and other suspicious activities in real-time through sophisticated algorithms and data analytics. There are heightened reporting requirements for listed companies and market participants, mandating more detailed and timely information on their trading activities, including disclosures of substantial shareholdings, changes in shareholding structures, and any related party transactions.
Furthermore, the SET has amplified penalties for breaches of its trading rules and regulations, acting as a deterrent against market misconduct and encouraging adherence to the exchange’s guidelines. Collaboration with regulatory bodies, such as the Securities and Exchange Commission (SEC) of Thailand, has been bolstered to facilitate information sharing and coordinate enforcement actions.
In parallel, the SET has emphasized investor education to raise awareness about market risks and responsible trading practices, employing resources such as workshops and information dissemination. These collective measures aim to elevate the integrity and transparency of the Thai capital market, safeguard investors from potential misconduct, and sustain an equitable and organized trading environment.
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