SET App
Settrade App
Service for institutional investor
Algorithmic Trading
Algorithmic Trading
Algorithmic Trading
Algorithmic Trading relies on computerized trading software that can automatically create and execute orders. Broker members must be granted permission from SET before using this strategy and before providing Algorithmic Trading services to clients.
Algorithmic Trading
Algorithmic Trading relies on computerized trading software that can automatically create and execute orders. Broker members must be granted permission from SET before using this strategy and before providing Algorithmic Trading services to clients.
There are two types of Pre-trade risk management system (PTRM): one that accommodates a specific trading strategy, and one that accommodates several trading strategies.
- Application for Algorithmic Trading via the PTRM which accommodates a specific trading strategy (SET only)
This application is for each specific trading strategies that the User intends to use. SET will assess the risks and measures to control related risks that may impact the overall trading system and trading conditions resulting from the specific strategies applied. An advantage of this application process is that the member is able to prepare the PTRM specific for their applied strategy, resulting in lower resource usage and the ability to promptly enhance the readiness of the PTRM. Nonetheless, in case the User wish to adopt additional trading strategies after the existing strategy has been approved by SET, the member will be required to apply for another PTRM that can manage the risk arising from the new strategies. - Application for Algorithmic Trading via the PTRM which accommodates several trading strategies (SET & TFEX)
A member is able to apply for the PTRM to accommodate Algorithm Trading involving several trading strategies. The submitted PTRM must be able to control various types of risks with a broader coverage than the PTRM for a specific trading strategy. An advantage of this type of application is that it allows flexibility in onboarding new trading strategies after the approval. In this regard, in case the existing approved PTRM is able to control the risks from the new strategies, the member can onboard new trading strategies without submitting additional application. The member must be responsible for recording information on the type of trading strategies and submit such information to SET and TFEX annually or upon request. Nevertheless, in case the existing PTRM deems to be unable to control the risks from the new trading strategies, the member is responsible for improving the PTRM and submitting additional application before onboarding the new strategies.
Summary of the Type of Application for Algorithmic Trading
| Type of Application | Pros | Cons |
| Submission of orders via the PTRM which accommodates only a specific strategy | Use less resources since members are able to develop PTRM specific to the specific strategy | Must submit additional application in case new strategies are introduced |
| Submission of orders via the PTRM which accommodates several strategies | After obtaining the permission, in case the approved PTRM is able to control the risks from the new strategies, new strategies may be introduced without additional application | Must develop the risk management system to be able to control risks with a broader coverage than PTRM for specific strategy. |
Members shall have a general understanding of how Algorithmic Trading operates and have minimum risk-management systems in place, as follow:
- Configuration control parameters for both brokers and customers which include log keeping for subsequent inspection.
- Review of Algorithmic Trading parameters (required at least once annually).
- Customer screening to include credit limit controls and customer disclaimer of liability from using Algorithmic Trading.
- Ongoing education on SET rules and regulations, Algorithmic Trading user manuals, and crisis-management procedures.
- Member’s monitoring and alert: Company member personnel in charge of the monitoring of Algorithmic Trading shall respond to operational and regulatory issues in a timely manner.
- Retain manuals and guideline regarding troubleshooting and crisis management.
- Maintain order screening systems or other systems to prevent order entries that may adversely affect the market, lead to a highly volatile market, or violate the laws including prevention of orders pushing the price of securities, orders entered and subsequently cancelled, split orders, and wash sale orders. Member brokers must prevent such orders at the client’s ID level, not just the client’s account level, whether a cash, cash balance or credit balance account.
Important: Members must submit information relating to clients, in case clients develop or self-procurement such Algorithmic Trading, to SET before providing services to clients for inspection.
- Member submits request form for connection to SET trading system via SCP Member Digital form https://www.setportal.set.or.th
- Member conducts a system test and submits test results.
- SET reviews the request form, supporting documents and test results.
- SET make an approval decision. After receiving approval from SET, the member will then be able to inform clients they can send trading orders via Direct Market Access.
The length of the approval process depends upon the accuracy and completeness of the member’s request form, supporting documents, and test results.
Equity Trading
In order to tighten the HFT supervision, SET will require members to register their HFT clients who uses algorithmic trading, developed specifically for such client or any group of clients, to generate orders from SET’s Co-location.
Member can submit HFT registration form via SCP Member Digital form https://www.setportal.set.or.th. Minimum information required for the registration are as follow:
Member can submit HFT registration form via SCP Member Digital form https://www.setportal.set.or.th. Minimum information required for the registration are as follow:
- HFT client’s profile and contact
- HFT client’s trading account no.
- Details of HFT client’s securities deposit and settlement
- Member’s measures to control the trading of their HFT clients
- Others as mentioned in registration form
Relevant Document
| High-frequency trading registration form |  |
For more information please contact
Securities Trading Operation Department
For more information please contact
Securities Trading Operation Department
