High-turnover securities to be limited
The Securities and Exchange Commission (SEC), the Stock Exchange of Thailand (SET) and the Association of Securities Companies expect to reach a conclusion about setting a limited trading amount exclusively for high-turnover securities by the end of this month, said SEC senior assistant secretary-general Pravej Ongartsittigul.
The measure is aimed at preventing risks from share delivery and settlement, he explained.High-turnover securities are stocks changing hands in many rounds each day, which might lead to irregular movements. The idea of setting a maximum trading amount of high-turnover securities came after the stock regulators found each investor might trade some stocks at a relatively high volume. This would create a domino effect from one broker to another broker if investors suffered such a heavy loss that they could not settle the transaction. Pravej said investors might be required to put down collateral for trading high-turnover securities at 50 per cent or 80 per cent of the transaction value. However, he did not reveal further details of the measure. "We've already discussed this issue, in order to find pre-emptive measures, but they don't work well. We then thought investors were the cause and that we should control the problem via investors," he said. He said implementation was expected to take effect next January. To reduce stock speculation, the SET has adopted a prohibition on irregular stock movements from intra-day and margin trading. At the moment, the securities watchdog announces a high-turnover securities list every Friday. "We'll still continue releasing such a list every Friday, and brokers will then implement measures based on the list," said Pravej.
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