Stock trading Unable to request a broker You can review your margin account services. Behind the executive Many companies use their shares as collateral to obtain loans. Even forced to sell, pointing out that it is the broker's duty to ensure that net liquid capital is not affected. Ready to warn small investors to check the stock before investing.
Date: July 11, 2024 Mr. Rongrak Panaputthikul, Deputy Director, Head of Legal Department and Chairman of the Company Secretariat Working Group The organization's guidance as a spokesperson of the Stock Exchange of Thailand (SET) revealed that it is a case where many executives of listed companies have placed large amounts of shares as collateral for debt settlement in the margin account. In this regard, we would like to inform that at present the Stock Exchange The information regarding the shares placed as collateral for settlement in the margin account has already been reported through the website of the Stock Exchange of Thailand on a monthly basis
Reasons for disclosure On a monthly basis and as a result of this information, the securities company (broker) must submit information on the receipt of shares as collateral in the margin account. To the Securities and Exchange Commission (SEC) and the stock exchange to be disclosed The latest information can be checked until the end of May 2024. https://www.set.or.th/th/market/statistics/market-statistics/margin-accounts
For example, YGG places shares as collateral to repay debts in a margin account, at 54.23% of the total number of shares sold in the company. SCM places shares as collateral to repay debts in a margin account, at 52.09% of the total number of shares sold in the company, TFG places shares as collateral to repay debts in a margin account, at 51.36% of the total number of shares sold in the company, and GPI places shares as collateral to repay debts in a margin account, at 51.12% of the total number of shares sold in the company.
This is so that investors can study the information to make investment decisions. You can know which stocks are at risk if the stock price drops significantly and you may have to sell (Force Sell).
“If there is a stock where a lot of shares are put up as collateral for payment in a margin account, that is something we want investors to be careful about. However, we still do not know what will happen to these shares. Because we do not know who put up the shares as collateral. However, from the case where the executives took the shares as collateral, there is still nothing wrong. Because it is his stock. It is like owning a car and applying for a line of credit. As long as you do not default on your debt, you are still not in default,” Mr. Rongrak said.
However, this type of transaction is something that the exchange and the SEC should come together to look into in order to disclose information more quickly. At the same time, there are still some transactions that are considered equity financing, such as selling shares first and obtaining the right to buy them back. Placing shares with a custodian in a foreign country may not be reported to the SEC office because this type of transaction is not a form of placing shares as collateral.
Mr. Rongrak said that if some brokers change their policies regarding offering margin account services, such as Z.com stopping the service, and recently Beyond Securities is preparing to review that plan. Submitted to the stock exchange and cannot force other brokers to review their margin account plans. Because it will be evidence, but the brokers themselves have a duty to maintain their net liquid capital (NCR) within the standards set by the SEC. If they cannot do so, that broker will eventually face capital problems.
While the stock exchange monitors whether the broker has sufficient funds to settle and deliver the shares. By viewing the information through the company Clearing House (Thailand) Co., Ltd. (TCH)
Read the original news at: SET cannot require brokers to review margin services Reminder: Check stocks before investing
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