SET to tighten regulations on short selling and program trading starting from July 1, 2024

The Stock Exchange is set to enhance measures regulating short selling, as well as the continuous trading program, which will detail the characteristics of stocks eligible for short selling.

Key Takeaways

• The Stock Exchange of Thailand is implementing stricter regulations on short selling, including higher qualifications for eligible stocks and mandatory registration for High-Frequency Trading investors.
• The new measures aim to bolster trading oversight, boost investor confidence, and disclose information about investors exhibiting improper trading behavior.
• These regulations will be effective from July 1, 2024, and detailed information can be found on the Stock Exchange’s website.
• The initiative will include the registration of investors placing orders through High-Frequency Trading (HFT) and the disclosure of information regarding investors who exhibit improper trading behavior. These measures aim to bolster trading oversight and boost investor confidence, with implementation commencing from July 1, 2024.

Measures to supervise short selling

Enhancements to the qualifications for short-selling stocks in the non-SET100 group have been made. Now, only stocks that are larger and possess higher liquidity are eligible. These stocks must maintain an average market capitalization of no less than 7,500 million baht over three months and an average monthly turnover of at least 2% over the past year.

Additionally, there must be a minimum of 20 percent free float of shares held by small common shareholders. The Stock Exchange of Thailand will announce the updated list of securities eligible for short selling under these new criteria on their website.

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Measures to supervise trading programs

Mandatory registration for investors engaging in High Frequency Trading (HFT) is required before they commence trading, to improve oversight of this investor group and ensure stricter regulation.

Disclosing information about investors who have inappropriate trading behavior

The Stock Exchange will disclose information on investors exhibiting inappropriate trading order behavior to all member companies. This measure will enable member companies to monitor such investors more effectively, and it is set to be implemented starting July 1, 2024.

Investors and interested parties can view details of the revised criteria at Stock Exchange website www.set.or.th under the headings “Rules/Supervision” and “Rules – Circular regarding Members”