SET to implement new limits for warrant trades

The Stock Exchange of Thailand plans to introduce a common ceilings and floors regime for warrants, derivative warrants and transferable subscription rights from 5 July.
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The Stock Exchange of Thailand (SET) plans to introduce a common ceilings and floors regime for warrants, derivative warrants and transferable subscription rights from 5 July.

The new limits will help to limit risks, boost trading opportunity and reduce improper orders, according to SET.

“The amendment will enable investors to narrow risks incurring from price volatility which might be caused by placing improper orders or those placed in error. It will also help increase trading opportunity to investors,” commented Charamporn Jotikasthira, president, SET.

The new rules will bring the ceilings and floors for derivative warrants – which currently have no ceiling or floor limits – in line with those used for warrants and transferable subscription rights, which are currently set at no more than 30% of the previous closing price of the underlying security multiplied by the exercise ratio.

Furthermore, on their first day of trading, the price of derivative warrants, warrants and transferable subscription rights can deviate by no more than 100% from their initial public offering price and by no less than 50% of the last closing price of the underlying security.

The exchange says its order screening system will be extended to monitor unusual trading activities and the new limits.

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