Gor.Kor.(Wor) 3/ th December 2014

Transcription

1 Gor.Kor.(Wor) 3/ th December 2014 Re: Amendment of the market surveillance measures Dear Managing Director All members and non-member securities companies Ref: Regulations of the Stock Exchange of Thailand Re: Measures in Case of Abnormality in the Trading of Securities on the Exchange Attachments 1. Key summary of the amendment on market surveillance measures 2. Copy of the Regulations of the Stock Exchange of Thailand Re: Measures in case of abnormality in the trading of securities on the Exchange, 2001 (Amended December 19, 2014) 3. Copy of Rules, Conditions and Procedures for Temporary Suspension of Listed Securities Trading, 2012 The Stock Exchange of Thailand (SET) has received a mutual agreement from the Securities and Exchange Commission Thailand (SEC) to amend the SET regulations on measures Regulations of the Stock Exchange of Thailand Re: Measures in case of abnormality in the trading of securities on the Exchange and Rules, Conditions and Procedures for Temporary Suspension of Listed Securities Trading to enhance the effectiveness on market surveillance regulations in order to comply with the overall market structure and to prevent associated risks to investors as well as the system as a whole. Hence, in order to regulate securities with unusual trading patterns or demonstrate high trade concentration that might damage market order, the SET may order members to implement supervision procedures as follow: 1. To ensure its customers trade the relevant securities only using Cash Balance account. 2. To exclude the relevant securities from the calculation of trading credit line. 3. To prohibit customers to offset the trading value of buy amount and sell amount of a certain security on a given day (Net settlement). 4. To temporary prohibit trading of relevant securities. 5. To prohibit the short selling of securities. See Attachment 2 and 3 for details. The SET therefore requires the regulating procedures to base on following measures: 1. In case of a significant change in trading pattern from previously (Trading alert list) When a security demonstrates an unusual trading pattern and meet the Trading alert list criteria, which the SET would publish daily after the market closes, members are required to ensure that its

2 customers deposit cash in full prior to any share purchases (100% pre-paid) or trade the relevant security only using Cash balance account for three consecutive weeks commencing from the announcement date. And (1) For a security that demonstrates an unusual trading pattern during the Cash Balance period, members are required to extend implementing the existing measure for another three consecutive weeks commencing from the end date of the original measure. (2) For a security that meets the Trading alert list criteria again during the Cash balance period or within one month after the measure ended, members are required to follow a more advanced surveillance measure than previously adopted as follow: (2.1) Meets the Trading alert criteria for the second time: To prohibit the relevant security from the calculation of the trading credit line and to trade only using Cash balance account for three consecutive weeks commencing from the announcement date. (2.2) Meets the Trading alert criteria for the third time: To prohibit to offset the trading value of buy amount and sell amount of a certain security on a given day (the amount received from sale of the relevant security on the same day of buying will not be credited back as a credit line). To prohibit members to include the relevant security from the calculation of trading credit line (in all types of account) and to trade only using Cash balance account for three consecutive weeks commencing from the announcement date. 2. In case of unusual trading pattern as defined by the SEC s Turnover list criteria and the SET s conditions. A security that meets these criteria is to follow the original measure which is to trade only using Cash balance account for six consecutive weeks commencing from the announcement date. (1) For any security that demonstrates abnormal trading pattern during the Cash Balance period, it will be required to extend implementing the existing measure for another three consecutive weeks commencing from the end date of the measure. (2) For any security that meets the Trading alert list criteria again during the Cash Balance period or within one month after the measure ended, it will be required to follow a more advanced surveillance measure than previously adopted measure as follow: (2.1) Meet the Trading alert criteria for the first time: To prohibit the relevant security from the calculation of the trading credit line (in all types of account) and to trade only using Cash balance account, either for three consecutive weeks commencing from the announcement date or for the remaining days of the six consecutive weeks requirement, whichever is longer.

3 (2.2) Meet the Trading alert criteria for the second time: To prohibit to offset the trading value of buy amount and sell amount of a certain security on a given day (the amount received from sale of the relevant security on the same day of buying will not be credited back as a credit line). To prohibit members to include the relevant security from the calculation of trading credit line (in all types of accounts) and to trade only using Cash balance account, either for three consecutive weeks commencing from the announcement date or for the remaining days of the six consecutive weeks requirement, whichever is longer. 3. In case of a significant change in trading pattern. In the case where a security demonstrates a significant change in trading pattern in comparison to the normal pattern or present a high trade concentration of a particular individual or a group of individuals, which differ from the underlying factors or present no rational reason, the SET may consider to temporary halt its trade. The SET therefore would like to hereby inform and kindly request for contributions in order to improve the overall efficiency of the market surveillance structure. Nevertheless the above measures will be effective from Jan 5 th, 2015 onwards, though the longer system development time to support the measure to prohibit the relevant security to offset the buy amount and sell amount in a particular secular security on a given day will be is taken into consideration. (Signed) Supakit Jirapraditkul (Supakit Jirapraditkul) Executive Vice President The Stock Exchange of Thailand Market Surveillance Department Tel: ext

4 Summary of key information regarding the amendment of the market surveillance measures. 1. In case of a significant change in trading pattern from previously (Trading alert list). When a security demonstrates an unusual trading pattern and meets the Trading alert list, members are to ensure that all customers buy relevant securities only using Cash balance account (deposit 100% cash prior to all share purchases) for three consecutive weeks commencing from the announcement date. This is in addition to what the listed company currently has to disclose regarding the disclosure of material information and company s development that might cause the unusual trading pattern. 1.1 In case the unusual trading pattern still persists during the Cash balance period: members are required to extend the existing measure for another three consecutive weeks commencing from the end date of the current measure. 1.2 In case the unusual trading pattern persists and meet the Trading alert criteria again during the Cash balance period or within one month after the end date of the mentioned period (Cooling period): members are required to adopt a more forceful measure in the following steps: Meet the Trading alert criteria for the second time: To prohibit the relevant security from the calculation of the trading credit line (in all types of account) and to trade only using Cash balance account for three consecutive weeks commencing from the announcement date Meet the Trading alert criteria for the third time: To prohibit to offset the trading value of buy amount and sell amount of a certain security on a given day (the amount received from sale of the relevant security will not be credited back as a credit line). To prohibit members to include the relevant security from the calculation of trading credit line (in all types of account) and to trade only using Cash balance account for three consecutive weeks commencing from the announcement date. Nevertheless, whenever the security meets the Trading alert criteria yet again, the members are required to step up the measure immediately after the SET announcement, while at the same time terminate the original measure, and commence the new measure for three consecutive weeks; as shown in the diagram below:

5 2. In case of unusual trading pattern as defined by the SEC s Turnover list criteria and the SET s conditions. A security that demonstrates an unusual trading pattern, with high trade turnover, that meet the SEC s turnover list criteria and meets the SET s conditions, members are required to ensure that its customers trade the relevant security only using Cash balance account for six consecutive weeks commencing from the announcement date. 2.1 In case the unusual trading pattern still persists during the Cash balance period: members are required to extend the existing measure for another three consecutive weeks commencing from the end date of the current measure. 2.2 In case the unusual trading pattern persists and meet the Trading alert criteria again during the Cash balance period or within one month after the end date of the mentioned period (Cooling period): members are required to adopt a more forceful measure in the following steps: Meet the Trading alert criteria for the first time: To prohibit the relevant security from the calculation of the trading credit line (in all types of account) and to trade only using Cash balance account, either for three consecutive weeks commencing from the announcement date or for the remaining days of the six consecutive weeks requirement, whichever is longer Meet the Trading alert criteria for the second time: To prohibit to offset the trading value of buy amount and sell amount of a certain security on a given day (the amount received from sale of the relevant security will not be credited back as a credit line). To prohibit members to include the relevant security from the calculation of trading credit line (in all types of account) and to trade only using

6 Cash balance account, either for three consecutive weeks commencing from the announcement date or for the remaining days of the six consecutive weeks requirement, whichever is longer. Nevertheless, whenever the security meets the Trading alert criteria yet again, members are required to step up the measure immediately after the SET announcement, while at the same time terminate the original measure, and commence the new measure for three consecutive weeks; as shown in the diagram below:

7 Code of conduct and calculation examples 1. To exclude relevant security from the calculation of trading credit line. 3.1 The calculation of trading credit line on the next trading day is as follow: - Cash account: to exclude the relevant security from the calculation of trading credit line; the relevant security has no value in the determination of trading credit line. - Credit balance account: to include the relevant security as a collateral Maintenance margin (MM), however to exclude from the calculation of Excess equity (EE). 3.2 In case of remaining EE in Credit balance account: to allow customers to withdraw cash to purchase the relevant security, that is undergoing the measure, using Cash balance account. 3.3 To lessen the complexities regarding operation and system development, Initial margin (IM) of the securities that are undergoing the measure to be excluded from the calculation of trading credit line for Font office and Back office: to determine equal amount at 100%. 2. To prohibit customers to offset the trading value of buy amount and sell amount of a certain security on a given day (Net settlement). Means in case of the purchase and sale of the same security on the same day, the amount received from sale of the relevant security will not be credited back as a credit line for further purchase on that day (purchase date), however will be credited back on the next trading day. For example;

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