Program trading relies on computerized trading software that can automatically create and execute orders. Broker members must be granted permission from SET before using this strategy and before providing program trading services to clients.
Members shall have a general understanding of how program trading operates and have minimum risk-management systems in place, as follow:
- Pre-trade controls to ensure that orders comply with the rules and regulations of SET with regard to securities’ names, order types, volume, prices, tick sizes, etc.
- Configuration control parameters for both brokers and customers which include log keeping for subsequent inspection.
- Review of program trading parameters (required at least once annually).
- Record retention of transactions and audit trail logs.
- Ongoing education on SET rules and regulations, program trading user manuals, and crisis-management procedures.
- Customer screening to include credit limit controls and customer disclaimer of liability from using program trading.
- Control and prevention of program errors including typographical errors and duplicated orders.
- Member’s monitoring and alert: Company member personnel in charge of the monitoring of program trading shall respond to operational and regulatory issues in a timely manner.
- Maintaining a kill-switch function which can immediately stop all processes and auto-cancel the unmatched orders sent from program trading.
- Retain manuals and guideline regarding troubleshooting and crisis management.
- Maintain order screening systems or other systems to prevent order entries that may adversely affect the market, lead to a highly volatile market, or violate the laws including prevention of orders pushing the price of securities, orders entered and subsequently cancelled, split orders, and wash sale orders. Member brokers must prevent such orders at the client’s ID level, not just the client’s account level, whether a cash, cash balance or credit balance account.
- Securities trading
- Securities trading system
- Improper Trading Practices and Types of Trading Behavior
- Preliminary Guidelines on Risk Management Regarding Order Screening for Program Trading (PG)
Approval Process for Program Trading Connection
- Member submits request form for connection to SET trading system via SCP Member Digital form https://www.setportal.set.or.th
- Member conducts a system test and submits test results.
- SET reviews the request form, supporting documents and test results.
- Member sends signed documents and other required documents to SET by hand to:
Trading Operation Department, Fl.12
The Stock Exchange of Thailand Building
93 Ratchadaphisek Road, Din Daeng, Bangkok 10400
- SET make an approval decision. After receiving approval from SET, the member will then be able to inform clients they can send trading orders via Direct Market Access.
The length of the approval process depends upon the accuracy and completeness of the member’s request form, supporting documents, and test results.
Supporting documents required for the approval process
When requesting approval from SET, submit the following forms and any related documentation as specified.
Request Form for Connection of the Company’s Computer System to the Trading System of The SET (Form MO-Member 1) to be countersigned by authorized person of the company.
|System Security Assessment Form (Form MO-Security1)|
|Certificate of Software in the member’s computer system by the Independent Software Vendor/Service Provider (Form MO-ISV1) ; to be countersigned by System Developer.|
|Application for the Program Trading Software (Form MO-PROG1)
(In case of applying for using or providing program trading function).
Direct Market Access (DMA) Request Form (Form MO-DMA1); to be countersigned by authorized person of the company (In case of applying for providing DMA service).
|Form for Reporting the Intention to Utilize the API User on the SET CONNECT System (Equity Market)
(In case of increasing API users for new platform or function - additional costs may occur)
Members can submit forms and documents on Member Digital Form at https://www.setportal.set.or.th
For more information please contact
Direct Market Access and IT Products Development Department