The Securities and Exchange Commission of Thailand (SEC), with approval from the Capital Market Supervisory Board, has issued new regulations governing margin loans and tightened related risk management rules for securities companies and derivatives business operators.
In addition, the new guidelines prohibit the firms from offering loans secured by securities with unrestricted use of funds—a practice known as Loan Against Securities. The announcement is designed to ensure that securities firms provide services and manage risk appropriately, thereby reinforcing confidence in the overall capital market.
Key points of the new measures include:
- Revision of Initial Margin for IPOs: The initial margin requirement for newly listed (IPO) stocks has been updated to reduce the risk that collateral could become insufficient to cover debt obligations.
- Stricter Lending Limits: The regulations now align lending practices more closely with the financial standing of each securities company. Limits on the total outstanding margin loans given to all clients or any single client have been made more stringent.
- Risk Management for Collateral Concentration: Securities firms are required to implement risk management measures in cases where clients place concentrated holdings of collateral stocks. This includes setting concentration thresholds, monitoring the quality and concentration of collateral and debtors, risk reporting, and timely problem resolution.
- Eligible Investment Funds as Collateral: The rules clarify which types of mutual funds — such as index funds, unit trusts, and feeder funds meeting specific criteria — can be used as marginable securities and as collateral in margin accounts. For fund units listed on the Stock Exchange of Thailand, such as ETFs, they remain eligible as margin collateral and marginable securities under existing rules.
- Prohibition on Unrestricted Loans Against Securities: Securities companies and derivatives business operators are now prohibited from offering loans against securities where the use of funds is unrestricted (Loan Against Securities). Assessment should be based on the substance of the transaction, regardless of its form, to prevent circumvention of the rules.
The new regulations will take effect on October 16, 2025, except for the stricter lending limits in point 2, which will come into force on April 16, 2026. Firms with outstanding loans exceeding the new thresholds before the official announcement in the Royal Gazette will be given one year from the publication date to comply with the requirements.
