THAILAND Law and Practice Contributed by: Wongsakrit Khajangson, Panupan Udomsuvannakul, Koraphot Jirachocksubsin and Pitchaya Roongroajsataporn, Chandler Mori Hamada
7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations The regulations do not specifically state the cri - teria for using algorithmic trading for each asset. However, under the Stock Exchange of Thai - land (SET) Notification Re: Procedures on Trad - ing, Clearing and Settlement of Securities in the Exchange, specifying the criteria for the use of computer programs in creating and recording orders automatically ( “Program Trading” ) includ - ing algorithmic trading, an operator who wishes to use Program Trading has to obtain approval from the SET prior to such use. The SET also provides guidelines regarding the qualifications and criteria for Program Trading that will be used in the market. 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity Under the SET Notification Re: Persons Involved in the Trading System B.E. 2555 (2012), a per - son possessing the following qualifications can register as a market maker: • be a member or a non-member certified as a market maker by a member and undertake clearing and settlement through such mem - ber; • have market-making experience or personnel qualified to be a market maker; • have systems or procedures and risk man - agement policies related to market making; • not currently be subject to a five-year prohibi - tion from registering as a market maker by the SET; and • meet other SET criteria.
Moreover, the Thailand Futures Exchange (TFEX) has established the following qualifications for registering as a market maker: • be a TFEX member, a member’s corporate cli - ent named by the member as a market maker, or any other juristic person with a clearing guarantee agreements; • have market-making experience in derivatives trading or personnel qualified to be a market maker; • have adequate system readiness or proce - dures and risk management policies related to market making; and • maintain financial stability with no risks affect - ing market-making duties. TFEX may set additional criteria for persons wishing to be any of the following market mak - ers: • juristic person customers or juristic persons with clearing guarantee agreements; or • market makers in futures with regulator- approved underlying goods or variables. 7.3 Regulatory Distinction Between Funds and Dealers From a regulatory perspective, there is no dis - tinction between funds and dealers in the algo - rithmic trading area. 7.4 Regulation of Programmers and Programming There is no regulation under Thai law specifi - cally governing programmers and programming. However, for programming, an algorithm has to be approved by the relevant authority, and the programmers have to be aware of the prohibited characteristics of trading as specified in the SEC Act.
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