TISCO SECURITIES

The Stock Exchange of Thailand (SET) was enacted in 1974 and started trading on April 30, 1975. It is a juristic, non-profit organization under the supervision of the Securities and Exchange Commission (SEC).

According to the Securities and Exchange Act (SEA) 1992, the SET has three primary roles as follows:-

1. To serve as a center for the trading of listed securities and to provide the essential systems needed to facilitate securities trading.
2. To undertake any businesses relating to the Securities Exchanges such as a clearing house, securities depository center, securities registrar, and etc.
3. To undertake any other businesses approved by the SEC.

As small and medium-sized enterprises (SMEs) are widely accepted to play a significant role in the recovery of the Thai economy, the SET fully recognizes the importance of SMEs in supporting the development of a sustainable economy as well as the necessity of developing a mechanism for SMEs to gain access to funds in the capital market at a lower cost and risk. The Market for Alternative Investment (MAI) was therefore established by the SET on June 21, 1999 as a new fund-raising channel for SMEs.

MAI Index is calculated apart from that of the SET. Nevertheless, the indices are calculated the same way, i.e., recording the overall volume of stocks traded on September 2, 2002 as the base date.

The SET previously used the traditional open auction floor trading conducting through a board knocking system. Up until 1991, the SET has changed the traditional system to a fully-computerized trading system known as the "Automated System for the Stock Exchange of Thailand" or the ASSET system.

This has resulted in improved efficiency and transparency of trading system. In addition, it has facilitated trading activities. There are two trading methods in the ASSET trading system which are Automatic Order Matching and Put Through transactions.

1. Automatic Order Matching Trading (AOM)

   Automatic Order Matching (AOM) Trading performs the order matching process according to price then time priority without human intervention. After brokers electronically send buy or sell orders from their offices to the SET mainframe computer, the ASSET system then implements order queuing processes and arranges orders according to a price-then-time priority. This means that orders are firstly grouped based on prices, with the best price taking precedence. Then, within each price group, orders are arranged according to time. For matching process, there are two matching procedures, i.e., continuous order matching and call market matching.

   Continuous order matching operates during the regular trading session. The ASSET continuously matches the first buy and sell orders in the queue while continuously confirms each executed transaction via brokers' terminal.

   The call market system is utilized in calculating opening and closing prices of each securities at the opening and closing times of trading hours. The system allows brokers to enter their orders to be queued for matching at a specified time at the single price which generates the greatest trading volumes of that particular stock.

2. Put Through Trading (PT)

   Put Through (PT) Trading facilitates brokers to advertise their buy or sell interests by announcing bid or offer prices. Any interested brokers can deal directly with that brokers either on behalf of their clients or for themselves. The price can be adjusted during negotiation and as a result the executed prices may not be the same as that advertised and may not follow the price spread rules. After concluding negotiations, dealers must send details of the results to the ASSET for recording purposes.

Internet trading is a new channel of securities investment. Investors can electronically send their orders to brokers from anywhere around the world. In addition, investors can acquire their trading information both historical and real-time data whenever they want. Internet trading can be used for all listed securities via the AOM method, with limit-price orders only. Only the main board, the odd-lot and the foreign board can accept Internet Trading orders.

The SET’s trading hours are on banks’ working days. Trading activities are divided into two sessions, 10.00-12.30 a.m. in the morning session and 2.30-4.30 p.m. in the afternoon session. (Note that Thailand time is plus 7 hours from the GMT.)

The 30-minute before each trading session is called the pre-opening period which at that time the SET's computerized trading system starts receiving buy or sell orders but does not match the orders. The orders are then placed in the system's bid/offer queue according to price and then time.

At the end of the pre-opening period, the system begins the matching process, where the opening price for each stock is calculated from the price which generates the largest volume. After opening transaction are executed, the exchange is open for regular trading.

Trading Session		Trading Method	Remarks
Pre-opening I	9:30 - T1	Call Market	T1 is the random opening time during 9:55 - 10:00 for calculating the opening price in the morning trading session.
Morning Trading Session	T1 - 12:30	AOM, PT	-
Intermission	12:30 - 14:00	-	-
Pre-opening II	14:00 - T2	Call Market	T2 is the random opening time during 14:25 - 14:30 for calculating the opening price in the afternoon trading session.
Afternoon Trading Session	T2 - 16:30	AOM, PT	The trading system stops matching all orders at 16:30; however orders can still be sent for queuing until the market closes (T3).
	16:30 - T3	Call Market, PT	T3 is the random closing time during 16:35 - 16:40 for calculating the closing price of each day.
Off-hour Trading	T3 - 17:00	PT	The trading system allows only PT transactions to be recorded.

Off-hour trading is the extra trading period for investors or members to have the additional opportunities to trade stocks after the closing of the regular trading sessions. The main objectives of these off-hours trading are as follows:-

1. To facilitate investors especially institutional investors and foreign investors, to adjust their portfolios and attract more trading activities in market.
2. To save as a tool for investors or brokers to adjust error transactions or cover transactions which are executed in the regular trading session.

Off-hours trading starts from the random closing time until 17:00 hours.

Only Put-Through transactions can be recorded on the main board, big lot board and foreign board, as specified in the following rules:

Trading Boards	Volume/Value	Price	Others
Main Board	Each transaction must be in board lots with a volume less than 1 million shares and a value less than 3 Million baht.	Closing price or average price* of that trading day. If neither is available, the last closing price will be used.	- Trading both 1 firm and 2 firm PT - Advertisement via trading system is allowed.
Big Lot Board	Each transaction must have a minimum volume of at least 1 million shares or a minimum value of at least 3 million baht.	Price Limits refer to main board price limitation except cases of mergers and acquisitions which are permitted by the SET	- Trading both 1 firm and 2 firm PT - Advertisement via trading system is allowed.
Foreign Board	No minimum volume and value requirement.	No spread and no daily price limit.	- Trading both 1 firm and 2 firm PT - Advertisement via trading system is allowed.

Remark : *The average price of local or foreign shares is the value-weighted average from transactions executed by the Automatic Order Matching Method of that trading day on the main board, or the foreign board, respectively (including opening and closing prices)

Trading Rules
Trading Period - The off-hour period starts from the random closing time until 17:00 hrs. (Run-off period)

Trading Method - Only put-through (PT) transactions can be recorded on main board, big lot board and foreign board under the following rules:-

A trading unit or a board lot contains 100 units of each security. However, for securities priced at 500 baht or above for six consecutive months, one board lot has 50 shares. Furthermore, the SET provides other types of trading units in order to serve different investment objectives. These include odd lot and big lot.

The odd lot is the transaction which has an amount of shares of less than one board lot, while the big lot is the transaction which has a trading volume of one million baht or above, or has a trading value of at least three million baht.

Securities trading on the SET is conducted via five trading boards as follows:-

Trading Products	Trading System	Requirement
1. Main Board
Common stocks, preferred stocks, warrants, unit trusts	AOM	> 1 board lot or a multiple thereof with spread and price limits
2. Foreign Board
Stocks registered under foreigners' name	AOM	> 1 board lot or a multiple thereof with spread but without price limits
	PT	no minimum quantity without spread and price limit
3. Big Lot Board
Common stocks, preferred stocks, warrants, unit trusts	PT	> 3 million Baht or 1 million shares with price limits refer to main board price limitation except cases of mergers and acquisitions which are permitted by the SET
4. Odd Lot Board
Common stocks, preferred stocks, warrants, unit trusts	AOM	< 1 board lot with spread and price limits

The main type of trading order at the SET is the limit-price order, which is an order to buy or sell at a specified price. In addition, as part of efforts to service all types of investors, the SET has introduced seven other types of orders for main board trading.

Non-limit Price Orders

1. Market Price Order (MP) is an order to buy or sell a stock at the best price currently available.

2. At-The-Open Order (ATO) is an order to buy or sell a stock at the opening price.

3. At the Close Order (ATC) is an order to buy or sell a stock at the closing price.

Conditional Orders

4. Immediate-Or-Cancel Order (IOC) is an order to buy or sell a stock immediately at a specific price on the condition that if there is any remaining volume unmatched the remaining volume will be canceled.

5. Fill-Or-Kill Order (FOK) is an order to buy or sell the whole ordered volume at a specific price. If this condition cannot be met, the order is canceled.

Publish Orders

6. Publish Orders is an order to buy or sell a stock with an ordered volume of at least 10 board lots (mostly 1,000 shares) while also specifying the equal amounts of the ordered volume to be published in the ASSET. When the published portion of the ordered volume is executed, the next remaining portion is placed in the queue until the whole ordered volume is executed.

Basket Order

7. An order to buy or sell a group of securities simultaneously In the SET's trading system, Basket order will be separated for each security to queue and execute as normal order.

Component of Basket Order

• Traded securities must be in the SET50 Index List.
• At least, 10 securities per basket.
• At least, 15 million Thai Baht per basket.
• Orders in a Basket must be either buy or sell.
• Basket order is a single-client transaction.
• Each order in a Basket must be limit price order that price within +2% of the last execution price.

Floor and Ceiling Limits

The current limits allow prices of a stock to fluctuate within a range of 30 per cent of the previous closing price on the main board. However, there are some cases that stock prices may fluctuate within a range of 100 per cent of the previous closing price as follows:-

• First trading day of new listed stock
• No trade of a particular stock more than 15 working days.
• Market price of that stock less than 1 baht.
• First trading day when XD, XR, XS or XA signs posted.

Price Spreads

Price movements, as stipulated by the SET, vary according to the market price level as follows:-

Market Price Level (Baht)	Spread (Baht)
Less than 2	0.01
From 2 to less than 5	0.02
From 5 to less than 10	0.05
From 10 to less than 25	0.10
From 25 to less than 100	0.25
From 100 to less than 200	0.50
From 200 to less than 400	1.00
From 400 upwards	2.00

In order to ensure fair and efficient trading, the SET uses special supervisory signs to regulate trading and inform investors of special situations and conditions that may affect the securities of any listed company.

Sign	Name	ความหมาย
H	Trading Halt	- Trading in the security is halted for a maximum period of one trading session.* This may be because of : Critical changes or major events concerning a listed company which have occurred during trading hours. The firm involved must then clarify the situation with the SET immediately. Trading conditions (e.g., price fluctuations) which indicate that some investors may have received important news or information about a listed company before it was formally disseminated to the public. Trading which may have been halted at the request of the issuer in order to allow for clarification of a major development or for a news announcement to be made during trading hours. Major events which may critically influence the ASSET trading system. *Remarks: The Halt Sign may be removed at any time during the trading session, if deemed appropriate by the SET, and/or following clarification or resolution of the situation.
SP	Trading Suspension	- Trading in the security is being suspended for more than one trading session. This may be because of : Replacement of the NP sign by the SP sign, following the failure of the issuer to adhere to SET disclosure regulations. Failure of the issuer to follow regulations or to provide adequate explanation in the event its share price changes without legitimate reason. Failure of the issuer to submit required financial statements within five business days of the NP posting sign. Failure of a listed company to submit required financial statements at least two consecutive times (The SP sign is posted the third time the firm fails to submit the required information).
NP	Notice Pending	- The issuer failed to submit a quarterly or annual financial statement to the SET (via the ELCID system) by the specified time. - The SET is awaiting the disclosure of additional information from the issuer or the information which has been received is incomplete or unclear.
NR	Notice Received	- Sufficient disclosure of the additional information, as requested by the SET, has been made by the issuer. (The NP sign is promptly replaced with the NR sign when additional disclosures is made as requested).
NC	Non-Compliance	The securities of a listed company that may be delisted.
CM	Call Market	The security of a list company which has incomplete shareholding distribution as stipulated in the regulations of the Exchange regarding maintaining the status of listed companies on the Exchange, and which is required by the Exchange to have its ordinary shares traded according to the Call Market methods.
ST	Stabilization	The stock that being in the process of shares purchased for delivery of the over-allotted shares.

The SET provides four indices for indicators to investors as follows:-

SET Index
The SET Index is a composite index calculated from stock prices of all common shares on the main board. It is a market capitalization weighted price index which compares the current market value of all listed common shares with the value on a base date of April 30, 1975, when the SET Index was established and set at 100 points. Its calculation is adjusted in line with new listings, delistings, and capitalization changes in order to eliminate other effects which are beyond price movement from the index.

Sectorial Indices
Aside from the SET Index, the SET also provides sectorial indices for investors. Sectorial indices are calculated from the prices of common shares in each sector. The calculation method is the same as that of the SET Index.

SET50 Index
The SET50 Index was launched on June 17, 1996 to accommodate the issuing of index futures and index options as well as to provide a benchmark for measuring performance of mutual funds investing in the SET.

The Index is a market capitalization weighted price index calculated from the share prices of the top 50 listed companies on the SET, with large market capitalization and high liquidity using a base date of August 16, 1995. The list of component stocks in the SET 50 Index is revised every six months. Please click here to see the list of SET50 stocks.

SET100 Index
From May 3, 2005 onwards, the SET has launched the new Index, the SET100. The Index is a market capitalization weight price index calculated from the share prices of the top 100 listed companies on the SET, applying the same criteria as SET50, using the base date of April 30, 2005 with the beginning of 1,000 points. The list of stocks in the SET100 Index is revised every six months. Please click here to see the list of SET100 stocks

How to select the stocks in SET 50 and SET 100
http://www.set.or.th/th/products/index/files/SET50100_Selection_Criteria_TH.pdf

In order to provide comprehensive and effective investor protection, the SET has placed special emphasis on prevention and deterrence to discourage misconduct. The main function of market surveillance is to monitor securities trading activities as well as to detect and investigate abnormal trading activities promptly and resolve in time.

To enhance the effectiveness and efficiency of market surveillance functions, the SET has employed a computerized system for market surveillance. The main tool that handles all market surveillance tasks is called "Automated Tools for Market Surveillance" or ATOMS. ATOMS is used to monitor securities trading activities in the SET, analyze any unusual trading, facilitate any investigation of suspicious cases, as well as document all the tasks to the database.

The unusual trading under consideration for market surveillance is prescribed in the Securities and Exchange Act (1992) or SEA as follows :

1. Insider Tradin - Securities trading made by any insiders, as defined in the SEA, based on inside information.
2. Market Manipulation - Securities trading made by a group of persons in co-operation so as to mislead other persons into trading any securities.
3. Misstatement - Rumours or fault information to mislead the public in making securities trading decisions.

Listed companies are responsible for publicly disclosing all materials that are important for investors' investment decisions. The SET has implemented a full disclosure policy, allowing investors to get accurate, adequate and timely information. This is to ensure market transparency and integrity. Disclosure is simultaneously transmitted by facsimile and on-line through the SET Information System.

Disclosure Procedure

To ensure equal access, any disclosure of material information must be made by listed companies at least one hour prior to the commencement of each trading session or after the close of the day's trading. Therefore, listed companies must submit their information as follows:

1. before 9.00 a.m. for the morning trading session; or
2. during 12:30 -1:30 p.m. for the afternoon trading session; or
3. anytime from after 5:00 p.m. until 9:00 a.m. of the next morning for the following day's morning session.

If it is deemed necessary for any listed companies to make disclosures during the trading session, the SET is empowered to order a temporary prohibition trading of that securities by posting the H (Trading halt) or SP (Suspension) signs.

To facilitate instantaneous disclosures, the SET has established guidelines for determining what kind of information requires prompt disclosure as follows:

1. Information which is likely to have a significant effect on the market price of the firm's securities.
2. Information which is likely to be important for investment decisions.
3. Information which is likely to affect interests of shareholders.