SET will tighten regulations on short selling and programmatic trading from July 1, 2024

The exchange intends to improve its short-selling regulatory measures, as well as its continuous trading program, which will detail the characteristics of stocks eligible for short selling.

The initiative will include registration of investors placing orders through high-frequency trading (HFT) and disclosure of information about investors exhibiting inappropriate trading behavior. These measures aim to strengthen trade supervision and increase investor confidence, and will start to be implemented on July 1, 2024.

Measures to supervise short sales

Improvements have been made to the qualifications of non-SET100 short-sold shares. Currently, only stocks that are larger and more liquid are eligible. These shares must maintain an average market capitalization of not less than 7,500 million baht over a three-month period and an average monthly turnover of at least 2% over the past year.

Additionally, there must be at least 20 percent of free float shares held by small common shareholders. The Stock Exchange of Thailand will announce on its website an updated list of securities eligible for short selling in line with these new criteria.

Measures to supervise trading programs

Mandatory registration before trading is required for high-frequency trading (HFT) investors to improve supervision of this group of investors and ensure tighter regulation.

Disclosing information about investors who behave inappropriately in trading

The exchange will make available to all member companies information about investors exhibiting inappropriate behavior regarding trading orders. This solution will enable member companies to monitor such investors more effectively and is expected to be implemented from July 1, 2024.

Investors and interested parties can review the details of the revised criteria on the Exchange’s website www.set.or.th under the headings “Rules/Supervision” and “Rules – Member Circular”.