Mr. Vicharat Vichit-Vadakan, President of the SET, disclosed three important resolutions made at the SET Board of Governors meeting of August 2001 as follows.
- Approval for the Buy-in procedure to purchase securities for late delivery settlement (Buy-in).
To enhance transparency and to reduce the risk in the clearing and settlement system, the SET Board of Governors approved a change in the Buy-in method. A new special board has been established for purchasing the late delivery stocks, known as the Buy-in board. On the fifth day after the transaction is made or on the second day after the settlement date (T+5), the system will disseminate the list of stocks to be bought-in, then investors/brokers can send the sell orders for these stocks into the system. These selling orders will be approved according to volume and time priority four times a day at 1100 hours, 1230 hours, 1500 hours and 1630 hours. Then these Buy-in transactions will be settled immediately on the next day. Changing the buy-in method will help reduce the time period for late settlement from nine days to six. This will help reduce the risk in the clearing and settlement system and increase transparency by simultaneously disclosing information and completely computerizing operations.
- Approval of the implementation on three measures to protect irregular trading.
The aim is to increase measures to regulate unusual trading so to stop such behavior. The SET has proposed to the Securities and Exchange Commission (SEC) the regulation on measurement in the case of securities trading in an unusual manner and the SEC has already approved them. Therefore the SET Board of Governors approved the SET to implement three measures to cover the unusual trading of securities which are as follows:
- If the SET decides that trading behavior in a security is unusual, and the state of trading in that security may endanger the overall trading system due to extreme price volatility, and there is also big clusters in the value of trading then the SET shall temporarily suspend such trading on a net settlement basis, trading on margin basis or short selling.
- If the SET decides that there are behavior or characteristic which could be considered to cause severe fluctuations in the trading price and volume, clustering of securities trading, and there are other factors to be believed that such trading behavior derived from one individual or group of individuals, the SET shall forbid one or all members from sending the trading orders of these individuals into the trading system temporarily. In the case that the forbidden member continues to send trading orders from that individual or group of individuals into the trading system, the SET Board of Governors shall temporarily forbid that member trading until it is believed that the company will be able to abide by the rules
- If it is found that the trading of any stock is seriously unusual and could be dangerous to the overall trading, the SET shall suspend trading such stock temporarily.
- Appointment of Miss Sopawadee Lertmanaschai as acting manager director of the Market for Alternative Investment (MAI)
The Board passed a resolution to appoint Miss Sopawadee Lertmanaschai as acting manager director of the Market for Alternative Investment (MAI) and a member of the management subcommittee of the MAI as part of the role, effective from August 29, 2001.
