Thai bourse revises short-selling, high-frequency trading rules
It seeks to improve market stability, liquidity and investor confidence
THAILAND’S stock exchange will roll out revised rules from Nov 16, including changes to short-selling and high-frequency trading, as it seeks to improve market stability, liquidity and investor confidence, based on the filing.
The Stock Exchange of Thailand (SET) will allow stocks priced between five and 50 baht to trade in smaller price increments, a move aimed at narrowing bid-ask spreads and reducing trading costs, indicated the statement.
The bourse will also limit short selling to more liquid securities, including SET100 shares, underlying securities of single-stock futures, depositary receipts and exchange-traded funds.
Under the new rules, investors will be allowed to short-sell a security at a value equal to or higher than its latest traded price. The SET will also impose additional fees on accounts that submit large numbers of orders but execute relatively few trades.
The exchange will also scrap dynamic price bands, which limit how far individual securities can move within a certain period, for individual securities to reduce trading barriers; cut restrictions on what high-frequency traders can buy and sell; and get rid of minimum resting-time requirements to improve order-management efficiency.
The SET will also extend morning hours for transactions in derivative warrants and ETFs linked to foreign securities from Nov 16. Trading will start at 8 am, two hours earlier than at present, and closing times will remain unchanged, according to a separate filing.
The new measures were approved by Thailand’s Securities and Exchange Commission following a public consultation, the SET said. BLOOMBERG
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