The Capital Market Supervisory Board (CMSB) has approved extending the night trading session for derivatives products, specifically gold, to a 3am close, plausibly taking effect in next year's first quarter.
At present, night trading begins at 7pm, with the new pre-order session starting at 6.45pm, and ends at 11.55pm.
The Securities and Exchange Commission (SEC) will further consider details and contracts related to gold-referenced derivatives products before notifying the Thailand Futures Exchange (TFEX) of the effective date.
Gold derivatives products for the night trading session include 50-baht gold futures, 10-baht gold futures, Gold-D futures and gold online futures.
The extension aims to help investors better manage risks associated with global gold price movements.
The measure should also increase the attractiveness of investing in gold derivatives and yield long-term benefits for investors, said SEC secretary-general Ruenvadee Suwanmongkol.
Ms Ruenvadee is the CMSB's chairwoman. Other board members include SEC deputy secretary-general Sirivipa Supantanet, Fiscal Policy Office director-general Lavaron Sangsnit and four other people appointed by the finance minister.
TFEX managing director Rinjai Chakornpipat said the extension will likely take effect in next year's first quarter. The confirmed date will be announced later.
Since the US gold market and factors affecting gold price movements are active during the night-time in Thailand, extending the closing hour to 3am is appropriate, Ms Rinjai said.
The TFEX will consider adding other futures products for the trading-hour extension, she said.
Gold derivatives make up 4-5% of total trading volume on the TFEX, with 90% of volume consisting of SET50 index futures and single stock futures.
Gold online futures are gaining in popularity. This derivatives product, with 99.5%-pure bullion as a reference, also shuns effects from foreign exchange fluctuation because price movements are aligned with those of global gold.
But Gold-D, a futures contract trading on the TFEX, has been less active because of the complicated trading process, pricing calculation, physical delivery and the collection of value-added and withholding tax, according to the Gold Traders Association.
Gold-D trading volume has been slim since trading began in September 2017.
Factors affecting Gold-D activity include TFEX's trading intermission of two or three periods, during which trading is discontinued, resulting in a loss of opportunity for investors to lock in profits or cut losses, especially during the evening break from 4.30pm to 7pm.
Markets in Singapore and Hong Kong have no trading intermissions and allow gold spot trading for 24 hours. They also offer trading in US dollars.
Gold-D is a physical settlement gold futures contract based on gold bars with 99.99% purity. Physical delivery is required upon contract expiry, with the contracts being quoted in US dollars but settled in baht.