SET board uses Uptick rule to prevent short sellers from pushing down Thai stock prices.

A brokerage source revealed that The Stock Exchange of Thailand (SET) board yesterday (24 April 2024) passed Approve the use of raising the Price Rule threshold so that short sale transactions must only be made at a price level higher than the last market price (Uptick rule). In order to prevent price dumps, after a hearing was held for measures to control short selling (Short Selling) on ​​April 21, 2024, the majority expressed approval to take action as well. Using the Uptick rule to reduce the impact of short selling as currently 50% of the volume comes from foreign investors.

Previously, the way The SET did not implement such measures during the period of confidence problems in the Thai stock market in 2023. Because it is considered that It is not yet time to take such measures. And market conditions are fundamentals, not significant abnormalities. As a result, it still uses measures to set prices equal to or higher than the last market price (Zero Uptick Rule), even though if implemented, the software can be fixed. And if it can be implemented, it will create strict measures that will make investors confident.

“There are a lot of measures that have come out. and adjusted in many aspects But it is not at the right point, otherwise the stock market must regain investor confidence. The big point is that it should be strict and the use of strong medicine is not done. This is reflected by large institutional investors in Thailand still investing only 2-3% of their portfolios from the original 10% and turning to foreign investments. As for the fund, there is no Thai stock fund issued to support it. Retailers are lost and don’t want to invest more.”

As for measures related to investors HFT (High Frequency Trading) It is considered an important point to register to track trading behavior. This is because the number of this group is not high but the trading value is very high. and is in a major broker It was noted that the registration criteria are not new because they already exist.

But what What should be added is the separation of HFT groups of mechanical type and also relying on the advantage of sending orders quickly because they are close to the stock exchange’s trading system or colocation from each other so that they are not groups of the same type of HFT. To reduce the advantage, there was no touch or correction in this matter.

However, today (24 April 2024) the SET will make a statement clarifying the issue in the topic. “Progress on measures to enhance supervision” It is believed that this will provide further clarification with the added measures. and the implementation of increased measures and passed the hearing (Hearing) on ​​21 April 2024.

Proofreading….Suree Silawong