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The Stock Exchange of Thailand (SET) has tighten its market supervision rules, Trading alert list and Cash balance, to enhance effectiveness on market surveillance regulations and to prevent associated risk of investor and the market as a whole. The rules have received an approval from the Securities and Exchange Commission (SEC) and will be effective from January 5, 2015 onwards.
The rule adjustments are: any securities showing unusual trading patterns and meeting Trading alert list criteria not only must disclose its company’s significant information update for investors after the market closes, but must also adopt Cash balance rule, requiring investors to pay the full amount of cash ahead of trading, for three consecutive weeks. In addition, if any securities that resumes unusual trading pattern and meets Trading alert criteria list for the second time, the Cash balance rule, plus banning the use of securities as trading limit calculation will be applied for three consecutive weeks after the announcement. Furthermore, if the unusual trading continues repeatedly and met Trading alert list criteria for the third time, at this level SET will prohibit net settlement trading on those securities, causing the amount received on sale of the relevant security will not be credit as a purchasing limit on the same day, on top of the imposition of Cash balance rule and banning the use of securities as trading limit calculation for three consecutive weeks after the announcement.
In addition, to enhance efficiency of SET’s market supervision, the exchange will consider extending the period for each level as appropriated and might announce trading halt for those securities that demonstrate a very unusual trading pattern without any supportive fundamental background.
As for any securities that has been categorized into the Turnover List as announced by the SEC and has met the SET’s criteria, it has to apply with the Cash balance rule for six consecutive weeks as usual. However, during the sanction period, if any securities enter into Trading alert list, all the rules mentioned above will be applied.
