SET tightens rules in bid to strengthen market surveillance

The rules have been approved by the Securities and Exchange Commission and will go into full effect on January 5. Under the new rules, any securities showing unusual trading patterns and meeting trading alert list criteria not only must disclose their company’s significant information update to investors after the market closes, but must also adopt the cash balance rule requiring investors to pay the full amount in cash ahead of trading for three straight weeks. 

If any securities resume an unusual trading pattern and meet trading alert list criteria for the second time, the cash balance rule, plus a ban on the use of the securities in the trading limit calculation, will be applied for three straight weeks after the announcement. 

If the unusual trading continues repeatedly and meets trading alert list criteria for the third time, the SET will prohibit net settlement trading on those securities, causing the amount received on the sale of the relevant security not to be credited as a purchasing limit on the same day, on top of the imposition of the cash balance rule and the ban on the use of the securities in the trading limit calculation for three straight weeks after the announcement. 

To enhance the efficiency of the SET’s market supervision, the exchange will consider extending the period for each level as appropriate and might announce a trading halt for those securities demonstrating a very unusual trading pattern without any supportive fundamental background.

Any securities that have been categorised on the turnover list as announced by the SEC and have met the SET’s criteria will have the cash balance rule applied for six straight weeks as usual. 

However, during the sanction period, if any securities enter the trading alert list, all the rules mentioned above will be applied.