Securities Clearing Services

Thailand Clearing House Company Limited

Type of Members

TCH has designated the following types of clearing members:

1. General Clearing Member (GCM) : a member who undertakes the Securities clearing and settlement for itself or clients, or for other members or other members’ clients.
2. Direct Clearing Member (DCM ): a member who undertakes the Securities clearing and settlement for itself or clients whereby the member’s clients must not be the members of SET or the members of TCH.

Membership Qualifications

Have the shareholders’ equity according to the criteria prescribed by TCH

A General Clearing Member (GCM) must have the shareholders’ equity of not less than THB 500 million
A Direct Clearing Member (DCM) must have the shareholders’ equity of not less than THB 250 million

Be a member of the Clearing Fund

Membership Qualifications

Be a juristic person licensed to operate the businesses in the category of securities brokerage or securities dealing or other persons as prescribed by TCH

Have a net capital according to the criteria prescribed by the SEC Details click here

Be a securities depositor at a securities depository center Details click here

Rights of a Member

TCH members have the rights to use the securities clearing and settlement services in TCH’s system as well as other services made available by TCH, provided TCH may render different services to the Members based on their membership categories

Membership Fee

Item	Fee
Admission fee	None
Monthly fee	THB15,000
Other fees	Detail Click here

Membership Application Documents

Application Form

Membership Admission Process

	An applicant submits an application form and supporting documents
	TCH considers the application
	The applicant attends the TCH system training and test
	TCH notifies the applicant of the result of its consideration
	TCH notifies the applicant of the commencement date of its membership (once the applicant has fully complied with the criteria and has all qualifications required)
	The applicant makes a contribution to the Clearing Fund and submits documents required by TCH
	The applicant commences operation as a member

TCH Members

List of members

Related rules and regulations

Regulations of TCH (Chapter 300 Members)

Notifications on Fees and Expenses Relating to Services of TCH

Settlement Agent

TCH authorizes settlement agents to settle and deliver securities on behalf of its members. Settlement agents can be custodians, commercial banks, state-owned specialized banks, finance companies, or securities companies.

Settlement Agent Qualification

Being a juristic person licensed to operate the following businesses:

Securities trading business
Securities custodian
Mutual Fund Trustee
Debenture holder representative
Brokerage or underwriter
Institutional investors as prescribed by the Securities and Exchange Commission
Financial institutions established by law
Domestic or foreign securities depository centers
Other persons as prescribed by TCH

Have the shareholders’ equity of not less than THB 150 million

Be a member of a depository center. Depository Membership Application Details click here

Membership Fees

Item	Fee
Admission fee	None
Monthly fee	Details here
Pre-Settlement Matching Transaction Fee	Details here

Settlement Agent Application

Settlement Agent
Application

Application Form

List of Settlement Agents

List of Settlement Agents
(effective as of 7 May 2021)

Securities Clearing and Settlement

Securities Clearing
and Settlement

There are two securities settlement methods: Net Settlement and Gross Settlement.

Net Settlement

TCH applied the Delivery versus Payment (DvP) clearing and settlement method for securities traded on SET and mai, which requires payment for securities to be made at the same time the securities are delivered. The procedure is an international clearing and settlement standard recommended by the Group of 30, a collaboration of post-trading services organizations formed to develop a standardized operational approach.

The DvP method reduces risks to the clearing house, which acts as the securities clearing and settlement guarantor, builds confidence in the system, increases liquidity in the Thai capital market, supports cross-border transactions, reduces settlement time, and allows investors to use securities immediately. The clearing and settlement for equity securities must be carried out within the second business day after the trading day (T+2).

Net Settlement Procedure

Net Settlement
Procedure

Cash Clearing

TCH acts as an intermediary of cash clearing between buyers and sellers. There are 2 methods of the payment depending on the types of clearing members:

1. General members will send/receive the payment to/from their settlement banks, which are Siam Commercial Bank Pcl., Bangkok Bank Pcl., Krung Thai Bank Pcl., Citibank and Standard Chartered Plc.
2. Associate members will send/receive the payment through the Bank of Thailand’s BAHTNET system.

Securities Settlement

In terms of securities settlement, the TSD, as the appointed settlement agent, will transfer securities in the clearing member’s accounts using the book entry through the TSD’s securities depository system according to the information from TCH.

• Clearing members are responsible for maintaining the securities in their securities depository account at the amount sufficient for their securities delivery obligations as indicated in the TCH report by 1.30 p.m. on the Settlement Date (T+2).
• For clearing members who are entitled to receive securities will receive the securities in their securities depository account after the cash clearing process is finished.

Clearing members must open a depository account (Portfolio Account)
separate from the accounts of the member's clients (Client Account) as specified by the Depository Center.

to separate the assets and obligations of members and clients. In case of defaulting on securities delivery, defaulting member will not be able to use the client’s securities for covering their own account.

Gross Settlement

Clearing members may specify the settlement date since trade date to the settlement date according to its settlement cycle of each security. General members have to create the gross transaction by referring to trade deal. Clearing and settlement will be processed on time of specified settlement date below:

• By 15.00 hrs. on the trading day to the day preceding the clearing and settlement date
• By 12.30 hrs. on the due date for clearing and settlement of securities

The Gross Settlement transaction must be one with a trade report and a minimum transaction value of 50 million baht.

Members must report the specified transaction to Member Supervision Department, the Stock Exchange of Thailand with in 14 working days after gross settlement process is done.

Gross Settlement Procedure

TCH acts as a Central Counterparty (CCP) for buyer and seller members

As a counterparty, TCH is exposed to counterparty risks when its clearing members fail to meet their obligations, so it is critical for TCH to assess any potential financial risks and design an effective risk containment model and financial safeguards. TCH has consistently developed risk management policies and tools to mitigate the risks associated with securities clearing and settlement defaults.

Collateral requirements

Collateral requirements

1. The Early Warning System: A calculation of daily risk value in the clearing and settlement system of general members to determine the maximum damage value that could result from a change in securities prices. If a member's risk value exceeds TCH’s limit, the member must place collateral to cover the damages that may occur.

2. Settlement Cap: A limit on each member's clearing and settlement value based on the member's financial situation. If a member's Cumulative Settlement Value (CSV) exceeds the settlement cap, TCH will ask the member to place collateral.

3. Stress Test: TCH will ask members to place collateral if the damage value in a crisis situation exceeds the TCH's financial resources value to ensure sufficient financial resources to cover losses that may occur during the crisis.

Although TCH has three collateral call approaches, the actual collateral call value is the highest of the three, and members are required to place collateral by 11.00 hrs.

Assets Deposited as Collateral

The assets that members can deposit as collateral must be subject to low market risk, liquidity risk, and credit risk. TCH has determined the following assets as acceptable collateral to ensure that the collateral can be used to pay off debts or cover potential damages:
1. Cash in Thai Baht
2. Securities listed on the Stock Exchange, provided that they are not issued by the member who has placed the collateral or the member's group of companies unless they are securities for
which the member is obligated to deliver to TCH
3. Government bonds or Bank of Thailand bonds

Definition of Default

A member is deemed to be in default when it fails to make payment for or deliver securities or fails to place collateral, contribute to the Clearing Fund, pay fees, interest, fines, damages, and any other costs for which the member has an obligation with TCH, or faces a bankruptcy case and is subject to the court's receivership order, or its liquidity or financial condition deteriorates to the point where such member is unable to undertake securities clearing and settlement, or fails to pay any other debts in relation to securities clearing and settlement.

Default of Payment

If there is a default of payment, TCH may undertake one or several of the following actions:

Suspend the transfer and clearing for transfer of securities in the settlement account of the defaulting member or its defaulting client, and sell the securities subject to the suspension in such account and use the proceeds to pay the amount of default and damages.
Suspend payments for securities that the defaulting member is entitled to receive, according to the report, on the first day that the payment default is deemed to occur and on subsequent days, and apply the money that such defaulting member is entitled to receive to pay for the amount of default and damages.
Require the defaulting member to post collateral as prescribed by TCH to guarantee that the defaulting member will make the payments subject to the default and compensate TCH for damages, and to enforce such collateral to use the proceeds to pay for the amount of default and damages.
Enforce the payment from the collateral which is placed by the defaulting member as a guarantee for risk management in the clearing and settlement system, and use the proceeds thereof to undertake the payments that are subject to the default and to compensate damages from the default by the defaulting member in order to make the payment for a member who is entitled to receive.
Use the funds from the Clearing Fund in accordance with the rules, conditions, and procedures prescribed in relation to the Clearing Fund.

Default of Delivery

Suspend payments for Securities which the defaulting member is entitled to receive, pursuant to the report, on the first day on which the default is deemed to occur and on the following days, and use the money to which the defaulting member is entitled to receive to purchase the securities having the category, type, and amount as same as the securities that the defaulting member is obligated to deliver, in order to deliver such Securities for the pending receiver.
Suspend the transfer or the clearing for transfer of Securities in the Settlement account for the defaulting Member or its defaulting client, and sell the suspended Securities in order to use the proceeds thereof to purchase the Securities having the category, type, and amount as same as the Securities that the defaulting Member is obligated to deliver, in order to deliver such Securities for the Pending Receiver.
Require the defaulting Member to place collateral in accordance with the rules as prescribed by TCH in order to guarantee that the defaulting member will deliver the securities that are subject to the default and pay compensation for damage to TCH. TCH may enforce such collateral pursuant to the rules prescribed by TCH in order to use the proceeds thereof to purchase the Securities having the same category, type, and amount as the securities that the defaulting member is obligated to deliver, in order to deliver such securities to the pending receiver.
Enforce the payment from the collateral which is placed by the defaulting member as a guarantee for risk management in the clearing and settlement system, and use the proceeds thereof to purchase the Securities having the category, type, and the amount as same as the securities that the defaulting member is obligated to deliver, in order to deliver such securities for the pending receiver.
Use the funds from the Clearing Fund in accordance with the rules, conditions, and procedures prescribed with respect to the Clearing Fund.

Securities Borrowing and Lending (SBL)

TCH will act as a lender and borrower on behalf of its members to reduce the problem of delivery default.
TCH will borrow securities from a depository member who expresses an intention to lend to TCH and has sufficient securities for lending under the SBL service. A collateral deposit will be made to ensure that the securities are returned to the lender within the specified timeframe of no more than 6 business days. TCH will charge borrowers and lenders 10% of the borrowing fee. If TCH is unable to borrow securities, it will purchase securities from the market (Buy-In), and the default member will be liable for all expenses incurred.

Qualification of Borrower and Lender

The borrower must be a TCH member
The lender must be a depositor at a TCH-designated depository center with a system linked to TCH.

Collateral placement

To reassure the lender that the securities will be returned, the borrower must place collateral in cash only at a rate of 130 percent of the borrowed securities value, and TCH will return the collateral to the borrower once the lender has received all of the securities back.

Return of Securities

The borrower may request that the securities be returned before the maturity date.
Return of securities upon maturity:

TCH will clear the securities in the borrower's settlement account and return the securities to the lender's lending account.
If the securities in the borrower's settlement account are insufficient, the borrower is considered to have defaulted and must borrow securities from TCH
If TCH is unable to borrow securities at maturity, it will deliver to the lender the penalty amount in lieu of the deficient amount of securities at a rate not less than 130 percent of the borrowed securities value

TCH will initiate the buy-in transaction on the first business day following the date the member defaults on securities delivery, with settlement on the same day (next day buy-in, same-day settlement), and will demand the default member to pay a fine for securities delivery default from the date of default until receiving the securities for delivery in full. The default member is responsible for all buy-in costs.

If TCH is unable to initiate buy-in transactions within the prescribed periods, TCH may demand the default member to pay a fine to TCH for delivery to the pending receiver as compensation for damage in lieu of delivery of securities subject to the default in accordance with TCH's rules and methods.

TCH established the Clearing Fund with member contributions to cover damages that may result from payment or delivery default that exceeds a member's collateral. The Clearing Fund may also be used to compensate for damage caused by other members (Mutual Loss).

If a member fails to settle and deliver the securities, TCH will first use the member's collateral; if the member's collateral is insufficient, TCH will use the Clearing Fund, and the defaulting member must repay the fund in the amount used, plus interest from the date the capital is used.

TCH will accumulate all Clearing Fund benefits back into the Fund and return them to members upon the expiration of their memberships and payment of all outstanding debts to TCH.

Members of the Clearing Fund must make an initial contribution when they join and variable contributions based on the risks they may pose to TCH within the timeframe specified by TCH.

TCH Financial Resources

TCH has set aside financial resources to cover damages that may result from payment or delivery default that exceeds the member's collateral. The amount of financial resources, which include the Clearing Fund and the SET Reserve Fund, is determined by assessing the two members with the highest risk exposures in order to cover losses in crisis situations that may occur throughout the system.

An order of the utilization of TCH financial resources (Default Waterfall)

TCH determines the following order of utilization of financial resources in the event of payment and delivery default:

1. Collateral placed by the defaulting member
2. Contributions to the Clearing Fund by the defaulting Clearing Fund member
3. Contributions to the Clearing Fund by the SET according to the amount prescribed by TCH as the first part (THB 60 million)
4. Contributions to the Clearing Fund by other Clearing Fund members who are not in default
5. The remaining amount of contributions to the Clearing Fund by the SET after deducting the first part of the contributions of the SET
6. SET Reserve Fund

Time Table For Clearing Services

Transaction	Hours
1. Securities clearing and settlement
1.1 Gross Clearing	by 15.00 hrs. on the Trading date to Settlement date - 1 by 12.30 hrs. on Settlement date
1.2 Net Clearing
1.2.1 Normal hours (Session 1)
(1) Delivery of Securities	13.30 hrs. on Settlement date
(2) Payment for Securities	14.00 hrs. on Settlement date
1.2.2 Session 2
(1) Delivery of Securities	15.15 hrs. on Settlement date
(2) Payment for Securities	15.45 hrs. on Settlement date
1.3 TCH Buy-in
1.3.1 Delivery of Securities	13.25 hrs. on the buy-in date
1.3.2 Payment for Securities	14.00 hrs. on the buy-in date
2. Pre-Settlement Matching System (PSMS)
2.1 Creation of transaction
2.1.1 In the case that there is no conversion of Securities types / conversion of Securities types from Foreign to Local	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs. on Settlement date
2.1.2 In the case that there is conversion of Securities types from Local to Foreign or from NVDR to Foreign	by 20.00 hrs. on the trading date by 16.30 hrs on Settlement date - 1
2.2 Edit / Merger of transaction (Edit/Merge)	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs on Settlement date
2.3 Cancellation of transaction (Cancel)
2.3.1 Cancellation of unmatched transaction	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs. on Settlement date
2.3.2 Cancellation of matched transaction	by 20.00 hrs. on the trading date to Settlement date - 1
2.4 De-Match of transaction (De-Match)	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.00 hrs. on Settlement date
3. Creation and confirmation of Gross Clearing & Settlement transaction
Creation of transactions and confirmation by counterparties
3.1 Securities clearing and settlement on the creation date of transaction	by 14.00 hrs. on the trading date to Settlement date - 1 by 10.00 hrs. on Settlement date
3.2 Securities clearing and settlement on the day after the creation date of transaction onwards	by 20.00 hrs. on the trading date to Settlement date -1
4. Editing transaction
before the Securities clearing and settlement is due
4.1 Editing trading account number / type of investors	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs. on Settlement date
4.2 Editing type of Securities
4.2.1 Editing type of Securities	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs. on Settlement date
(1) Local to Foreign
(2) NVDR to Foreign
4.2.2 Editing type of Securities	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs. on Settlement date
(1) Foreign to Local
(2) Local to NVDR
(3) NVDR to Local
4.2.3 Editing type of Securities	by 20.00 hrs. on the trading date to Settlement date - 1 by 13.15 hrs. on Settlement date
(1) Local to NVDR
(2) NVDR to Local
after the Securities clearing and settlement is due
4.3 Editing type of Securities	by 19.00 hrs. on the transaction date
(1) Local to NVDR
(2) NVDR to Local
5. Give up/ Take-up transactions	by 20.00 hrs. on the trading date to Settlement date - 1 by 11.30 hrs. on Settlement date
6. SBL for Covered Fail
6.1 Securities borrowing	13.30 hrs. or at the end of the business day
6.2 Return of borrowed Securities
6.2.1 Return of borrowed Securities prior to the due date
6.2.1.1 Return of Securities from the depository account	by 13.15 hrs. or 14.15 - 15.15 hrs. or 16.15 - 19.00 hrs. on the transaction date
6.2.1.2 Return of Securities from the Securities on the current business day Normal hours for Securities clearing and settlement (session 1)	by 11.30 hrs on the transaction date
6.2.1.3 Return of Securities from the Securities on the current business day Securities clearing and settlement session 2	13.45 - 14.45 hrs. on the transaction date
6.2.2 Return of borrowed Securities on the due date	by 11.30 hrs. on the due date
6.2.3 Enforcement of collateral placed by the borrower by TCH	14.15 hrs. on the due date
6.3 Cash Settlement	14.15 hrs. on the due date
7. Default and delivery of defaulted Securities
7.1 Default and delivery of defaulted Securities	13.30 hrs. and 15.15 hrs. on the due date
7.2 Delivery of defaulted Securities
7.2.1 Delivery of defaulted Securities by clearing for transfer Securities from the depository account of the defaulting Member or the defaulting client of the Member	by 11.30 hrs. on the transaction date for the suspension of Buy-in transaction or 14.15 - 14.45 hrs. or 16.15 – 19.00 hrs. on the transaction date
7.2.2 Delivery of defaulted Securities by clearing for transfer Securities which the defaulting Member or the defaulting client of the Member is entitled to receive on the current business day
(1) Normal session for Securities clearing and settlement (session 1)	by 11.30 hrs. on the transaction date for the suspension of Buy-in transaction
(2) Securities clearing and settlement session 2	from 13.45 – 14.45 hrs. on the transaction date
7.2.3 Automatic delivery of defaulted Securities by maintaining the Securities in the defaulted account	by 13.30 hrs. or by 15.15 hrs. on the due date for Securities clearing and settlement
7.3 Cash Settlement	16.00 hrs. on the due date
8. Buy-in transaction
8.1 Creation of offer in the clearing system	by 11.30 hrs. on the transaction date
8.2 Submission of Securities sale order from the trading system	11.30 - 12.30 hrs. on the transaction date
9. Placement or return of collateral as a result (1) default in payment (2) delivery of Securities borrowing (3) lending for the purpose of delivery to TCH *
9.1 Placement of collateral in cash	by 14.00 hrs. on the date of default or the date of Securities lending and borrowing or the date of the shortfall in the collateral in cash
9.2 Return of collateral in cash	by 14.00 hrs. and by 15.45 hrs. on the date of the excess in the collateral in cash
9.3 Placement of Securities as collateral
9.3.1 In the case of default in payment for Securities, default in delivery of Securities, and default in Securities borrowing and lending for the purpose of delivery to TCH	by 14.00 hrs. on the date of default or the date of borrowing
9.3.2 In the case of placement of additional collateral or return of excess collateral in the form of Securities as a result of calculation of Mark to Market.	at the beginning and the end of business day
10. Deposit and withdrawal of collateral of Risk Value *
10.1 Deposit of collateral
10.1.1 Deposit of Non-cash collateral by Members	In case of being called to place collateral for Risk Value: by 10.00 hrs. on the transaction date In case of not called to place collateral for Risk Value: by 19.00 hrs. on the transaction date
10.1.2 TCH Deduction of cash in Thai Baht currency from the Settlement Account by TCH as collateral	11.00 hrs. of the transaction date
10.2 Withdrawal of collateral, both cash in Thai Baht currency and non-cash
10.2.1 The Member withdraws collateral in cash in Thai Baht currency	by 10.00 hrs. or 13.15 – 14.00 hrs. on the transaction date
10.2.2 The Member receives collateral in cash in Thai Baht currency in the Settlement Account	11.00 hrs. or 15.00 hrs. on the transaction date
10.2.3 The Member withdraws non-cash collateral	by 19.00 hrs. on the transaction date
10.2.4 The Member receives non- cash collateral	by 19.00 hrs. on the transaction date

* The deposit, withdrawal, transfer or the acceptance of transfer of non-cash collateral cannot be conducted between 13.25 hrs. – 14.45 hrs. and between 15.10 hrs. – 16.15 hrs. The Member shall conduct the transaction and approve the transaction by 13.25 hrs. and by 15.10 hrs. on the transaction date. If there is any outstanding transaction for approval after such time, TCH shall cancel such outstanding transaction and the Member can conduct a new transaction within the normal operating hours of TCH

Service Hours of TCH

1. Monthly Fee

icn_user_tch

General member 15,000 baht

icn_user_tch

Settlement agent 7,500 baht

2. Clearing and settlement fee

2.1 Securities traded in exchange

0.001 % of trading value, maximum of 350 baht/trading order

2.2 Pre-Settlement Matching Transaction Fee

Clearing and Settlement Transaction on behalf of Member	Tier	Amount of Transaction Per Month	Rate (THB per Transaction)
1. Clearing to Custodian transactions which consist of
	1	0 – 5,000	50
1.1 transaction between TCH member and Settlement Agent;	2	5,001 – 10,000	45
1.2 transaction between Settlement Agents themselves.	3	10,001 – 15,000	40
	4	>15,001	35
2. Transaction within Settlement Agent (Internalized)
2.1 transaction for settlement purpose for the same client			Exempted
2.2 transaction for settlement purpose for different clients			7.50

3. Penalties for Defaults on Cash Payment

3.1 For any delay of payments due to human errors without causing damages to securities clearing and settlement and delivery system
First default in one calendar year:	5,000 Baht
Second default in one calendar year:	10,000 Baht
Third default or more in one a calendar year:	50,000 Baht
3.2 If members have default for cash payment the stipulated time
General members: no more than 2 times of the defaulting value

4. Penalties for Defaults on Securities Settlement

4.1 In case of late delivery due to human errors
Second time in one calendar year:	2,000 baht
Third time or more in one calendar year:	5,000 baht
4.2 Late delivery
General members
Late delivery no more than 1 business day:	0.50% of the value of defaulted securities
Late delivery from 1 to 2 business days:	0.75% of the value of defaulted securities
Late delivery from 2 to 3 business days:	1.00% of the value of defaulted securities
Late delivery from 3 to 4 business days:	1.75% of the value of defaulted securities
* Such penalties must not be less than 300 baht per securities at a time

Related Information

The Thailand Clearing House Co. Ltd.

The Stock Exchange of Thailand Building 93 Ratchadaphisek Road, Din Daeng, Bangkok 10400
Open : Mon - Fri 08:30 - 17:00

Closed : Sat - Sun and according on SET Holidays

Securities

+66 2009 9549-53

+66 2009 9477

e-mail : SecuritiesClearingDepartment@set.or.th

Derivatives

+66 2009 9542-47

+66 2009 9477

e-mail : DerivativesClearingUnit@set.or.th

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