Thailand's SET Reinvents Market Supervision for Stability and Inclusivity in 2025

The Stock Exchange of Thailand (SET) has unveiled a sweeping set of regulatory reforms in 2025 aimed at curbing volatility, enhancing market integrity, and expanding access to capital for all investors. These measures, ranging from immediate restrictions on short-selling and high-frequency trading (HFT) to long-term infrastructure upgrades, reflect the exchange’s dual ambition: to stabilize markets while fostering inclusive growth. For investors, these changes present both risks and opportunities, reshaping the landscape for equities, bonds, and emerging green finance instruments.

Immediate Regulatory Adjustments: Tackling Volatility

Effective April 2025, the SET has imposed short-selling restrictions on all but the SET100 stocks, requiring short sales to occur at prices higher than the previous trade (the “uptick rule”). This move targets speculative pressure on smaller-cap stocks, which have historically faced sharp swings. Concurrently, HFT activities will be confined to SET100 stocks starting in May 2025, with the existing minimum resting time (MRT) of 250 milliseconds remaining in place to prevent manipulative order cancellations.

These measures follow a temporary suspension of normal trading rules from April 8–11, 2025, during a period of extreme volatility. The SET’s swift action underscores its focus on market stability, particularly in protecting retail investors from destabilizing practices.

Initial data suggests the rules have dampened volatility in smaller-cap stocks by 18% compared to 2024 levels, while liquidity in blue-chip SET100 stocks has remained robust.

Ongoing Measures: A Framework for Fair Price Discovery

Building on reforms introduced in 2024, the SET has maintained its dynamic price band of ±10% around the latest execution price, alongside the existing daily limit of ±30% from the prior close. Combined, these bands have reduced intra-day swings in over 60% of monitored stocks. The auction matching method—required for securities under Level 2 surveillance—ensures fair pricing in volatile conditions by aggregating orders at set intervals.

The MRT of 250 milliseconds, now a permanent feature, has cut algorithmic “spoofing” by 30% since its introduction in 2024, according to SET surveillance data. These tools collectively aim to level the playing field for retail and institutional investors alike.

Strategic Roadmap: Inclusive Growth and Tech-Driven Transparency

The SET’s 2025–2027 strategy goes beyond short-term fixes, focusing on long-term resilience and accessibility. Key initiatives include:

1. Jump+ Initiative: Boosting ESG and AI-Driven Excellence

The Jump+ program invites listed companies to adopt advanced ESG practices and AI analytics in exchange for visibility through a dedicated Jump+ index and government collaboration opportunities. Early adopters have seen their ESG scores improve by an average of 15%, attracting ESG-focused institutional investors.

2. Bond Connect Platform: Democratizing Fixed Income

The Bond Connect system now allows retail investors to subscribe to government bonds in primary markets, akin to IPOs, and trade them secondarily. Within six months, 40% of new bond subscriptions have come from retail accounts, a 25% increase over prior periods.

3. SET Clear: Future-Proofing Infrastructure

By 2027, the SET Clear settlement system will reduce trade settlement times from T+2 to T+1, aligning Thailand with global standards. This upgrade, paired with AI-powered surveillance tools, will enhance fraud detection and reduce systemic risk.

Climate Action and Financial Inclusion: The New Frontier

The SET’s carbon trading ecosystem, slated to launch in 2025, will enable companies to offset emissions through verified carbon credits. Already, 35% of listed firms have pledged to meet Thailand’s 2050 net-zero target, with the exchange offering free carbon footprint assessment tools. Meanwhile, SET Learn Scape, the exchange’s financial literacy platform, has trained over 100,000 retail investors since 2024, empowering them to navigate complex instruments like green bonds and ETFs.

Conclusion: A Balanced Market for All Participants

The SET’s 2025 reforms are paying dividends. Volatility in mid-cap stocks has dropped by 18% since April, while Bond Connect’s retail participation has surged. The Jump+ initiative has attracted $2.3 billion in ESG-linked investments in its first year, signaling a shift toward sustainability-driven capital flows.

However, challenges remain. The HFT restrictions could marginally reduce liquidity in smaller stocks, and the carbon trading ecosystem’s success hinges on global standards adoption. Yet the SET’s blend of regulatory rigor, tech innovation, and investor education positions Thailand’s capital market as a model for emerging economies.

For investors, the message is clear: quality over quantity. Focus on SET100 stocks with strong ESG profiles, engage with Bond Connect for stable returns, and watch the Jump+ index for high-potential disruptors. In an era of regulatory transformation, adaptability—and a long-term lens—are the keys to success.

Data sources: SET Annual Report 2025, SET Regulatory Circulars 2024–2025, and independent market analysis.