Thai SEC creates AI digital enforcement for capital markets

To sharpen its newly increased enforcement role, Thailand’s Securities and Exchange Commission (SEC) has developed an artificial intelligence (AI) driven project to catch wrongdoers in the capital markets.

“E-enforcement can help filter out unusual movement in stock prices and trading volume, such as price push-ups, ordering and cancelling orders, and strange behavior in order distribution,” said Anek Yooyuen, SEC’s Assistant Secretary-General of Enforcement

“The tool will make the inspector’s work easier, more precise, and prevent human error,” he added and said that the inspectors would be able to catch suspicious movements as soon as they occur.

While Thailand’s capital markets are well regulated and its central bank and the SEC are highly regarded, some fraud can and does take place in every market in the world. Better enforcement would only increase confidence among local and foreign investors in Thailand’s capital markets.

The Stock Exchange of Thailand is the largest capital market in Southeast Asia after Singapore in terms of market capitalization. Thai financial policymakers want to see the SET and other Thai markets grow even further and possibly challenge Singapore for the top spot.

The SEC’s e-enforcement project consists of AI enforcement, corporate surveillance, and an e-link. Its corporate surveillance will now use an online investigative tool that detects irregularities in companies’ financial status and operating results that may be fraudulent.

Anek said the online surveillance tool had been in use since the second quarter this year. In the future, it will include non-financial data, visualization of personal relationships between perpetrators, and a verification system.

He said that the SEC would integrate AI and machine learning in the surveillance program to speed detection and screening of unusual transactions, prevent the damage from spreading, shorten personnel working time, and reduce the number of fraud cases.