The Stock Exchange of Thailand recognizes the crucial role investor protection plays in enhancing investor confidence and contributing to market growth. Such protection is best understood as a combination of different, but closely integrated measures - including, but not limited to, market regulation & enforcement, trading and settlement system reliability, information disclosure and equal accessibility. Consequently, SET has established the Securities Investor Protection Fund or SIPF in cooperation with some of its member firms who volunteered to join the fund. Its purpose is to create confidence among investors who trade securities on the Exchange through the Fund's member brokers. Investors who are clients of SIPF members can receive their assets back or compensation for the price of assets from this fund in certain circumstances as defined in the regulations.
Market players, including member companies, stockbrokers, custodians, and listed companies, are regulated and must follow strict rules. Both the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) play an important role in regulatory enforcement; however, investors are advised to take the first step in investor protection by ensuring that they deal only with securities companies licensed by the Ministry of Finance upon a recommendation of the SEC. Investors are also encouraged to report any suspected misconduct or to file a complaint formally to the SET, the SEC or the Economic Crime Division of the Royal Thai Police.
The SET trading system has been fully-computerized since 1991, expanding trading capacity as well as improving efficiency and transparency. The trading system, the ARMS, has the capacity to handle 600,000 orders daily.
Clearing and Settlement Process
To ensure investor confidence during the whole trading cycle, the reliability of the clearing and settlement process is also of great importance. Clearing and settlement is handled by The Thailand Securities Depository Company Ltd. (TSD), which also handles securities deposits and is Thailand's main share registrar. The SET clearing and settlement cycle of T + 3 is on par with global standards. The TSD has also been addressing risk management to minimize settlement risk for all members. The TSD will:
- Implement Delivery-Versus-Payment (DVP) to be aligned with international standards as well as reduce the risks involved for investors .
- Move towards Real Time Depository Registration (RTDR) to enable investors and listed companies to access shareholder information instantly, enhancing trading efficiency and risk management, as well as reducing expenses for listed companies.
- Move to a 100% scripless system to enhance efficiency with risk management and settlement as well as reduce expenses with regard to share certificate issuance. The SET will coordinate closely with relevant government parties in this regard.
- Facilitate Straight Through Processing (STP) to enable a shift to T+2 settlement, and integrate relevant information to institutional investors and custodian banks. STP will support the reduction of expenses as well as facilitate the investment process for foreign institutional investors.
- Employ a clearing fund to provide security against damages caused by any settlement default. This fund has been established by the TSD already. Both the Stock Exchange of Thailand and TSD fund members contribute to the fund.
The market surveillance functions at the Stock Exchange of Thailand are enhanced by a computerized electronic monitoring system. Comprised of three main systems for the alert, detection and documentation functions, the ATOMS system was introduced in 1995 to monitor, analyze and facilitate the investigation of suspicious activities. Its effectiveness and reliability continue to play a key role in ensuring proper surveillance, exposing trading malpractice, supporting Exchange investigations and effective enforcement in the process. You can see more details in Market Supervision section.
In line with the global trends of capital markets with regard to disclosure-based screening for listing securities on the Exchange, a key goal of the Stock Exchange of Thailand is to develop a "well-informed" market by ensuring full disclosure of important information deemed relevant to investor's decision-making. This will ensure that investors are well-placed to assess, and protect their own interests in the market. Investors are also invited to conduct their own market research by accessing the SET market data section.
If you need any further information, please contact our Call Center at +662 009 9999 or Contact Us