An investor either holds a State Owned Enterprise (SOE) bond or corporate debenture until maturity or sells prior to maturity at the current market price. Investors can also buy bonds already issued. SOE bonds and most corporate debentures are registered with the Thai Bond Market Association. Bond trading is usually done over-the-counter by telephone. The Bond Electronic Exchange (BEX) provides investors with a platform for listed secondary market trading.

Over-the-Counter Market

Investors place their orders indicating the price and amount they want to trade. Various types of orders can be placed. A successful trade depends on whether the broker can find a buyer or seller on the OTC market. All trades must be reported to the Thai Bond Market Association (ThaiBMA).

The ThaiBMA monitors, compiles, and disseminates bond prices to the public. Its Bond Information Service provides dealer-members with basic information on the features of registered bonds (e.g., issue date, size, maturity date, par value, outstanding value, type of bond, and coupon), registration records, price movements, and other relevant data.

Bond Electronic Exchange (BEX)

Investors can place orders through BEX member firms or through brokerage companies that use BEX’s Automatic Order Matching (AOM) trading platform. Orders follow are prioritized based on price then the time the order is received. If the bid or offer price and volume match, the orders are done automatically.

Directly negotiated trades above THB10 million are allowed on the BEX using a “put through” method. After a deal is concluded, the seller of the bond initiates the put through transaction, with the buyer verifying the transaction when confirmation of the sale is completed.

The Thailand Securities Depository (TSD) clears and settles bonds traded on BEX. Investors make scrip deposits to TSD before trading.

Interest and principal payments are done by banks and securities companies either by check or by direct transfer to the investor’s bank account.