Intensive inspection of Naked Short Selling, stock market draws NASDAQ-Korean representatives

Reporters reported that on November 21, 2023, the Stock Exchange of Thailand An urgent press conference was opened on “Guidelines for further enhancing supervision” by Mr. Rongrak Panapawutthikul, Deputy Manager, Head of the Legal Division. The Stock Exchange said that the Stock Exchange There are additional guidelines for enhancing supervision. In terms of regulating the trading of trading programs and Naked Short Selling transactions (selling shares without actually having shares) and did not borrow shares to sell considered illegal cannot be done in the Thai stock market) with the Stock Exchange preparing to set up a special working group To help take care of and give advice and suggestions in examining the trading of the trading program and Naked Short Selling, consisting of representatives from the Securities and Exchange Commission (SEC), representatives from the Stock Exchange Representatives from the NASDAQ Stock Exchange (NASDAQ) and the South Korean Stock Exchange (KRX)

As for the case of checking normal short sale transactions The Stock Exchange has added criteria for brokers to submit securities information to customers who make short sales transactions within 15 days, that is, before the customers make a short sale. To know whether the customer has securities (stocks) in their possession before short selling or not. If the broker cannot send evidence within 15 days, it will be assumed that If the customer does not have shares in their possession (Naked Short), they will refer them to the Disciplinary Committee for punishment. The punishments range from warnings, fines, probation, and suspension of business licenses. In addition, the Stock Exchange will consider the equality of trading with trading programs and investors who do not use trading programs.

This has already been done by the Stock Exchange. The issue of supervision of short sale transactions is to send circular letters to instruct securities companies (SECs) that are members. and not a member Including companies that act as custodians. Let’s help check whether or not the customer has stocks in his or her possession before sending the trading order. Including coordinating with the SEC to help investigate Omnibus trading accounts, which are trading accounts with more than one person, usually a foreign investor. and there is a foreign custodian who keeps the stocks.

“The market has held a meeting to consider the criteria for short sales and whether to change the criteria for setting prices for short sales (Price Rule), but after considering it, there has not yet been an event that has an impact. It is significant that the criteria must be adjusted”.