The Chairman of the Inventory Trade of Thailand (SET), Pichai Chunhavajira, introduced plans to accentuate the nation’s crackdown on illegal short selling as shares proceed to underperform.

Presently, the regulation permits penalisation of solely the securities corporations that provoke the short-selling order. Nonetheless, the market authorities are considering amending the regulation to permit the prosecution of each people and corporations concerned in such trades, revealed Pichai.

Thailand’s initiative accompanies comparable measures adopted by counterparts like China and South Korea, following the obliteration of roughly US$156 billion of the market worth from the nation’s equities since their zenith in 2023. Prime Minister Srettha Thavisin known as upon market authorities to scrutinise improper transactions, together with short selling, to bolster investor belief and confidence.

The short-term measures will revive some confidence, however we nonetheless should do extra, expressed Pichai, who assumed the function of the bourse’s new chairman in February. He underscored the urgent want for additional steps to assuage investor apprehension and regain their belief.

The SET disclosed extra data final month about proposed tighter constraints on short selling and program buying and selling. The plans entail a lower available in the market worth of inventory permitted for short selling and escalated fines for securities corporations infringing the rules. The commerce of bare short selling, which entails selling shares with out prior borrowing, is ready to be prohibited.

The SET Index, a benchmark, has plunged over 3% this 12 months, marking probably the most vital declines in Southeast Asia, after a 15% drop in 2023. Moreover, the day by day buying and selling turnover has dwindled by over 10% in comparison with the earlier 12 months as a result of fewer orders from particular person shareholders, as per information collated by Bloomberg and the inventory trade.

Short-selling transactions represent roughly 10% of the overall buying and selling turnover, primarily based on the trade’s information courting again to September. The bourse started publishing these figures in response to issues about their potential correlation with the market downturn.

Pichai additionally disclosed the SET’s plans to suggest authorized amendments to expedite the providing and buying and selling of digital belongings comparable to funding and utility tokens. Prime Minister Srettha has offered tips for the bourse to place itself because the buying and selling hub for digital belongings in Southeast Asia.

The proposed alterations to the prevailing legal guidelines have been put forth in discussions with the Finance Ministry, Securities and Trade Fee and different regulation enforcement companies, Pichai, reported Bangkok Publish.

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