The Stock Exchange of Thailand (SET) has agreed a plan with Korea Exchange (KRX) to help develop Thailand’s clearing and settlement system as part of a series of enhancements to its market.
Under SET’s operations master plan, which spans five years to 2016 and was developed with management consulting firm Oliver Wyman, the exchange will work to strengthen its trading operations, depository, registrar and clearing and settlement services.
In the first phase, SET will strengthen its risk management. Phase two will expand access to new products and services for members of the exchange, derivatives market, clearing house and central depository. Phase three will focus on optimisation of operations internally by boosting efficiency of trading, clearing and settlement. The final phase will centre on growing new business by creating new products and services to diversify into new business areas.
KRX will help improve the clearing and settlement system for equities, derivatives and bonds in Thailand.
“These two key developments are for increasing SET’s competitiveness, creating business opportunities for members and boosting investment potential, as well as meeting demands of investors and market participants,” said Charamporn Jotikasthira, SET president. “These improvements reinforce our great efforts to continuously match the right financial opportunities for investors and all other market participants.”
As part of the reforms, SET has also revised its trading rules to comply with international stock exchange standards. These include ceiling and floor price adjustments based on symmetrical price bands, improvement in calculating opening and closing prices based on those that yield the highest volume of trading, introducing categories of market orders such as special market orders and market to limit orders, and introducing order amendments that allow the bid amount to be reduced without losing the bid’s place in the queue, which was previously not possible.
“Some trading rules have been amended to be more in line with standards of global leading stock exchanges,” added Jotikashthira. “This should help facilitate investors, while enabling broker members to be ready for regional connections and increase our competitiveness at the international level.”
Earlier this month, SET said it is also on track for the planned Q3 overhaul of its equities trading, market data and surveillance systems in partnership with Swedish technology firm Cinnober – a deal that was originally signed by the two parties in June 2011.