SEC accelerates new Thai stock trading rules: Uptick applied only to stocks falling 10%, adds Veto Right for retail investors
Regulation
Pornanong Budsaratragoon, Secretary-General of the Securities and Exchange Commission, disclosed progress on cooperation with the Stock Exchange of Thailand in reviewing and upgrading securities trading regulations, with plans to announce their implementation by the end of this year, after passing public hearings and review by the SEC board. For short selling, the Uptick rule will shift from being enforced market-wide to being applied on a per-security basis, whereby any stock whose price has fallen 10% or more will immediately be subject to the Uptick rule on the next trading day. The qualifications of stocks permitted for short selling will also be reviewed every six months, and only highly liquid stocks in the SET100 may qualify; any stock dropping out of the SET100 will be removed from the list immediately. On volatility measures, the Dynamic Price Band will be scrapped during normal trading hours but retained for cases of unusually severe market volatility or market disruption. Meanwhile, the definition of high-frequency trading, or HFT, will shift from being based on server location to detection based on actual trading behaviour, and the concept of a minimum resting time for orders will be abolished in favour of charging additional fees to those whose order-to-trade ratio exceeds the threshold. In addition, the SEC will grant a Veto Right to shareholders who collectively hold 10% or more, allowing them to object to risky or inappropriate transactions even if the audit committee or an independent financial adviser does not object. The SEC board has approved the principle, and the Stock Exchange of Thailand is in the process of issuing it as a binding rule.
