Thai Government and Regulators Look into Bots and Naked Short-Sell Trading

The Thai Prime Minister shows concern about an illegal short selling in the stock market, saying that there could be this kind of trading in the Thai bourse despite the exchange’s president affirming non existing of such trade.

During an interview with Nation TV, the Thai prime minister Srettha Thavisin said that confidence and valuation in the stock market has plummeted due to several factors and one of them is a “Naked Short Sell,” which he believes there might be such trading in the market.

Mr. Srettha noted that the government is in touch with the Stock Exchange of Thailand and the Securities and Exchange Commission to handle the situation.

The comment by the Thai prime minister was the opposite of what the President of Thai stock exchange Dr. Pakorn Peetathawatchai who previously said that there currently are no naked short sell in the market, though the exchange did find and punish wrongdoers in the past. He said that those found in these types of illegal trading will be punished severely.

Despite the leader of the Thai government and president of the stock exchange saying two different things, and whether there is or is not illegal trading in the market, measures must be put in place to ensure security in the market.

Thai SEC and Association of Securities Companies met on Monday to discuss the matter. The agenda was to raise confidence and stability in the Thai stock market, which means handling the naked short sell and the program trading that has been taking over the market at around 40% of total trading volume by average. This is to put retail investors at ease as they claimed that it put them at disadvantage during the trading session.

Several measures have been proposed in the meeting between regulators and brokers to prevent illegal trading or loopholes in the market. The Thai SEC said that it is reviewing these measures to build stability and equality for all kinds of traders in the Thai stock market.