The Stock Exchange of Thailand (SET) has announced a more stringent fine structure for member brokerages, including a substantial increase in the penalties for so-called naked short selling, reports the Bangkok post.
Effective from Nov 1, the fine for a naked short-selling offence will triple to three times the illicit profits, with a new minimum penalty of 1 million baht ($29.6k). Previously, the penalty merely matched the profit without a baseline fine.
Market regulators earlier this year tightened supervision to address growing complaints by investors about volatility caused by short selling, legal and otherwise. The changes included an “uptick rule” that limited price movements under certain circumstances. In addition, brokers failing to make timely margin calls will face fines of 30,000 baht, up from the previous threshold of 10,000 baht.
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SET said it would classify brokerage violations into four categories:
- Trading, program trading, installation sites and hardware network connections
- System-based trading supervision by members
- Membership qualifications and duties, and
- Trading activities.