The Stock Exchange of Thailand (SET) announces a market consultation on proposed amendments to regulatory measures governing short-selling and high-frequency trading (HFT). These measures were implemented in 2024 as part of SET's initiative to strengthen investor confidence through enhanced regulatory frameworks. However, following a post-implementation assessment, SET would like to refine these measures for better alignment with current market conditions, while maintaining the importance of volatility controls.
SET invites all stakeholders to share their feedback on the following "Regulatory Review of Short Selling and HFT" intended to recalibrate existing rules while maintaining a strong focus on mitigating stock price volatility.
Key proposals in the consultation paper are set out below:
1) Measures for Securities with Significant Price Declines:
Revised Uptick Rule for Short-selling
The uptick rule will be applied only to short-selling of stocks whose closing price declines by 10 percent or more from the previous day’s closing price, instead of universally to all short-selling. (The zero-plus tick rule will be the default standard for short-selling orders.) This revision aims to reduce the restrictive impacts of the short-selling measures while aligning with practices of international stock exchanges.
2) Volatility Control Measures for Mid-cap and Small-cap Stocks
2.1 Revised Criteria for Stocks Eligible for Short-selling and HFT
Short-selling and HFT will be permitted for SET100 stocks with large capitalization and high liquidity. Stocks satisfying the market capitalization threshold of ³THB 7.5 billion will no longer be eligible.
2.2 Revocation of Minimum Resting Time (MRT)
Following the restriction of HFT to stocks with large capitalization and high liquidity, the MRT measure will no longer be necessary as high-frequency order submission and cancellation are unlikely to disrupt trading in such stocks.
The public consultation aims to obtain valuable opinions from stakeholders on the proposed amendments to the criteria as mentioned above. The consultation document and details are available on the SET website at https://www.set.or.th/en/rules-regulations/market-consultation under "Regulatory Review of Short Selling and HFT." Please share your feedback via https://forms.gle/jmocr6Fz68zKcJVW9 by March 31, 2025.
