The Securities and Exchange Commission has submitted a revised draft of the SEC Act of 1992 for consideration by the Council of State.
Following recent irregular movements of shares in the stock market, the SEC had proposed amending the Act in terms of punishment and civil sanctions.
Assistant SEC secretary-general Sakkarin Ruamrangsri recently said the SEC recently proposed the council revise the existing Act, particularly Chapter 8, which covers unfair stock trading and shareholding for business takeovers (Sections 238-244).
Revision should include the passing of fraudulent information and use of insider information, he said.
"Amendment will cover several sections in order to keep up with the current changing market situation," Mr Sakkarin said.
"The law should be amended to cover changing behaviors and relevant parties never covered before."
He said previously, the law covered only SET-listed companies, securities firms and executives of both.
However, amendment of the Act would extend coverage to any party spreading information that could mislead investors and the market as well as those spreading wrongful information to misguide investors into making wrong investment decisions.
"In the future, even if the rumour-mongers are not a company's executives, the spread of wrongful news and information that could affect investment decisions will be considered share price manipulation via the dissemination of untruthful information," Mr Sakkarin said.
In insider trading, such information given out is correct and true but does affect a stock's price.
At present, the law covers only insiders, who are defined as shareholders holding more than 5% and those close to the information such as financial advisers, government officials or SEC and SET officials.
In the future, insider trading law will cover anyone close to the information who purposely causes irregularities in share trading.
This will include anyone receiving information and investing before the information is announced to the public including people in all occupations and all channels of communication.
"Investors will be better protected under the law," Mr Sakkarin added.