Share manipulators should be subject to civil penalties as well as criminal punishment, says Finance Minister Kittiratt Na-Ranong.
Mr Kittiratt said he agreed in principle with the idea of making parties found guilty of manipulating share prices subject to civil fines to raise local enforcement standards in line with international practices.
But he added that Thailand needed to improve in many areas, including transparency within the justice system to ensure fair treatment for the public from the state.
Under the SEC Act, share manipulation is a criminal offence, subject to up to two years in jail and a minimum fine of 500,000 baht.
"That we only have criminal penalties under the 1992 SEC Act leads to a few shortcomings. For one, the punishment is too severe [for small-time offenders] and the process takes a long time," said Mr Kittiratt, a former president of the Stock Exchange of Thailand.
He cited a hypothetical case of a junior executive overhearing insider information that he later uses for his own investment benefits.
Under the existing law, such an act is a criminal offence.
By expanding the scope of the law to include civil penalties, market regulators will have greater flexibility in determining the appropriate action to take against share manipulators, Mr Kittiratt said.
First offenders, for instance, could be subject first to civil fines, and then penalised with criminal sentences for repeat offences.
A proposed amendment would set civil penalties at up to twice the benefits received from a manipulation.
The Securities and Exchange Commission, which is drafting proposed amendments to the SEC Act, has argued that making share manipulation subject to both civil and criminal liability would help improve efficiency in the enforcement process.
The SEC is the primary enforcement agency for the Thai capital market. But current law requires securities regulators seeking to file a case to do so through either the Department of Special Investigation or the Economic Crime Division of the Royal Thai Police, depending on the type of crime.
After an investigation, the DSI or the police must then forward the case to the Attorney General's Office before sending the case before the court, a process that can take years before all appeals are exhausted.