Thailand’s Securities and Exchange Commission (SEC) is considering revising the regulatory framework for short-selling transactions to better align with the current context of the capital market.
The SEC has opened a hearing on the proposed core principles and has conducted ongoing discussions with the business sector and relevant agencies, incorporating feedback from stakeholders—most of whom agree with the overall principles—and relevant suggestions for further review to ensure that the requirements are appropriate, consistent with securities companies’ practices, and lessen unnecessary burdens on operators.
The key elements of the revised regulations include:
1) Clearly defining the meaning of short-selling transactions.
2) Facilitating short-selling services upon client instructions, such as know-your-customer procedures for inter-broker clients and efficient short-selling order processes.
3) Requiring clients to certify that they have borrowed or sourced securities before placing a sell order, as well as eliminating the requirement for a recourse agreement.
Additionally, the SEC has clarified the criteria for providing Securities Borrowing and Lending (SBL) services, emphasizing that securities companies must have effective risk management systems and only lend or confirm the availability of securities for lending when there are sufficient securities in hand. This is to prevent the risk of lending or confirming more securities than are actually available.
The SEC has published the consultation document and full principles on the SEC’s website at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=1136 and the central legal system at https://law.go.th/listeningDetail?survey_id=NjQxM0RHQV9MQVdfRlJPTlRFTkQ=. Stakeholders and interested parties can review the details and provide feedback through the website, or send comments via email to [email protected], [email protected], [email protected], or [email protected] until February 11, 2026.
