Market Surveillance Department
Market Surveillance Department is responsible for maintaining an orderly market and enhancing market transparency and market integrity. The department's primary duties are to:
- Manage information disclosure of listed companies These firms have the duty to disclose any material information to investors and related parties through SET's channels of communication in order to be considered as being official. This requirement is to ensure that all investors are treated equally and equitably. However, if material information is not disseminated via SET and is likely to influence stock prices (e.g., rumours concerning mergers and acquisitions or management's revealing their firm's net income for the period just past), the Market Surveillance Department will immediately ask the company for confirmation/clarification and request it to issue material, accurate, adequate and timely information on the matter at hand to all investors via SET. This is to ensure that all investors have equal access to information and prevent insider trading.
- Monitor trading of securities and derivatives The department seeks to prevent market manipulation by those seeking to engage in improper trading. The department will initiate investigations if it suspects that improper trading and/or other actions have taken place that might violate the Securities and Exchange Act B.E. 2535 and/or Derivatives Act B.E.2546 are, such as:
- Misstatement - Rumours or faulty information to mislead those making securities trading decisions.
- Insider trading – Buying or selling of securities using company information that has not been disclosed to the public and could affect prices of the given security.
- Market manipulation - Securities trading with intent to distort the market as to price and/or quantity of a given security so as to mislead others.
To enhance its effectiveness and efficiency, SET uses computerised systems for market surveillance. The main tools that handle these tasks are:
- Market surveillance terminals (MS-Term): displays real-time trading data for monitoring securities trading, price movement, traded volume, and buy and sell orders that are sent to SET.
- Securities markets automated research trading surveillance (SMARTS):this state-of-the-art surveillance program facilitates monitoring of trading activities and enhances the effectiveness and efficiency of investigation procedures. SMARTS consists of these four key modules:
• ALMAS : This is a key part of the alerting system. Since electronic trading takes place far too quickly for the naked eye to analyze each trade, ALMAS screens individual transactions and alerts SET officials when abnormal trade have been detected. Analysts may run ALMAS over a range of past dates to examine whether there were any movements that triggered the alerts and need to be handled. This can also be run on real-time data to investigate particular conditions.
• SPREAD : This provides a broad graphical representation of the suspicious trading activity in the context of surrounding trading activity. It is possible to display any period, before or after the event. This module also provides extensive detail on a variety of other trading circumstances .
• REPLAY: This instrument uses tick by tick order/quote and trade data in its raw form to reconstruct or replay a trading environment exactly as it occurred. This is useful both for understanding the dynamics of the market-place and for interrogating data when inexplicable patterns emerge.
• REPORT: This program extracts lists of events from transaction logs in accordance with the thresholds set.
The Market Surveillance Department consists of three sub-units;
- Securities Surveillance, which monitors securities trading and conducts preliminary investigations
- Derivatives Surveillance, responsible for monitoring derivatives trading activities and conducting preliminary investigations
- Investigation, responsible for In-depth probing of both the securities and derivatives markets if SET rules, the Securities and Exchange Act B.E. 2535 and/or t he Derivatives Act B.E.2546 have been violated.
Market Surveillance staff will investigate a range of past dates when material non-public information occurred to examine whether there any persons defined as insiders by law bought or sold for his/her own benefit. SET will initiate in-depth investigation under SET authority if any person considered as an insider is involved.
Market Surveillance staff continually monitor trading activity for unusual trades throughout trading sessions. If there are abnormal movements, such as sharp price rises or trading volume which cannot be explained by accessible market information, and the department believes that there is a suspicious trading pattern, a preliminary investigation will be conducted to search for any violation of laws or any attempt to manipulate the security's price. When the preliminary investigation reveals a high probability of unfair trading, the case is sent to related authorities for further action.