SET toughens penalties for brokers

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.
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. Previously, the penalty merely matched the profit without a baseline fine, the SET said in a statement.
Naked short selling is the illegal practice of selling a security without first borrowing the asset or confirming that it can be borrowed. 
Legal short-sellers seek to profit from a stock’s price drop by borrowing shares and selling them, then buying them back later at a lower price.
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 the statement issued on Friday, the SET said it would classify brokerage violations into four categories:
Fines for a number of offences have been significantly increased to better reflect the severity of offences and their potential market impacts, it said.
For example, brokers failing to make timely margin calls will face fines of 30,000 baht, up from the previous threshold of 10,000 baht.
More information is available under the “Circular Letters” topic under the “Rules and Regulations” section on the SET website.