The Securities and Exchange Commission (SEC) is preparing to issue stock pledging regulations and review the uptick rule to control short selling within the first quarter of this year.
Given recent cases of company executives using shares as collateral in margin accounts to trade securities and as collateral for loans, Anek Yooyuen, deputy secretary-general of the SEC, said the regulator is considering ways to prevent market damages caused by such acts.
Any proposed measures must take into account possible impacts, minimising adverse effects on investors and the bulk of executives that follow the law, he said.
"The SEC is considering approaches, including information disclosure when pledging shares are used and at what percentage, whether retail investors can exercise their rights to request information, and the rights of stock owners to disclose information," said Mr Anek.
"These rules must be carefully considered in terms of every dimension."
The issue of pawned shares has also eroded market confidence, and the SEC wants to find a solution and launch preventive measures within the first quarter, he said.
Though some investors have called for short selling to be cancelled, Mr Anek said the practice is a useful tool for risk management, with most Stock Exchange of Thailand (SET) member companies in favour of allowing this tool to exist.
To create trust and confidence in the capital market, the SEC uses technology to ensure supervision is appropriate and timely to address risks, he said.
The regulator is developing a health check system in collaboration with the SET to detect possible fraud and financial statement manipulation at listed companies, said Mr Anek.
The SEC reported legal action against offenders was 15% faster recently due to several factors, including fewer operations procedures, better coordination with relevant agencies and use of advanced technology.
Last year 15 cases were prosecuted, up from nine in 2023, most of which were related to unfair acts in securities and digital asset trading, including corruption.
There were 10 civil penalties issued in 2024, with 699 million baht in fines sent to the Finance Ministry, according to the SEC.
To empower SEC supervision, amendment the SEC Act is being pursued, said Mr Anek.