Providing loans to investors
for purchasing securities
for purchasing securities
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Providing loans to investors for purchasing securities
Loans for investors to buy securities
- Credit balance account is an account for borrowing money to buy securities. The customer must obtain approval for the loan amount and place collateral before purchasing securities.
- In the case of customers placing cash as collateral, if the value of the shares purchased by the customer is lower than the cash secured, the debt will not be incurred.
- Customers buy/deposit securities Only securities approved by TSFC.
- TSFC will adjust the market value of the securities daily (Mark to Market) by using the Close Price in the calculation.
- If the value of the customer's investment (Equity) is lower than the value of the collateral to be maintained (Maintenance Margin Call Amount), the customer must bring cash. or securities to be placed as additional collateral (Call top-up) within 5 working days.
- If the value of the client's investment (Equity) is lower than the maintenance margin force amount (Maintenance Margin Force Amount), the client will be forced to sell (Force Sell) on the next business day.
Securities that are allowed to be purchased in a credit balance account
Because each security traded on the SET have different fundamentals and varied liquidity, therefore, TSFC will publish a list of securities that are allowed to trade on TSFC's credit balance accounts (currently about 200 securities), as well as determine their grades and the Margin Rate (Initial Margin Call Margin and Force Margin) suitable for each Securities, which TSFC will announce to customers on the TSFC website and will update the announcement of the list of securities at least once a month.
Interest calculation
TSFC calculates interest on cash balance/actual outstanding debt at the end of each day (Daily Accounting Balance) (example of calculating interest). Net Interest Amount will be added to the customer’s account at the end of the month. TSFC will send a statement to inform the customer every month.
- In case the customer has cash balance, customers will receive interest on deposits at the rate specified by TSFC.
- In case the customer has outstanding debt, the customer must pay interest on the loan at the rate stipulated by TSFC.
Interest rate announcement
| Account Type | Interest Rate (%) Per Year | Effective Date |
|---|---|---|
Account Type Interest rate for borrowing to purchase general securities | Interest Rate (%) 6.50Per Year | Effective Date August 3, 2023 |
Account Type Interest rate for credit balance account balance | Interest Rate (%) 0.30Per Year | Effective Date January 11, 2021 |
Account Type Highest interest rate in case when the customer defaults and/or breach of contract | Interest Rate (%) 20.00Per Year | Effective Date November 18, 2008 |
Terminology of Credit Balance
| Terminology | Unit | Description | Formula |
|---|---|---|---|
Terminology Usable Credit Line | Unit Baht | Description Available loan amount (set by TSFC) | Formula |
Terminology Cash Balance | Unit Baht | Description Cash | Formula |
Terminology LMV (Long Market Value) | Unit Baht | Description Securities value at closing price | Formula Sum of (no. of stocks x closing price) |
Terminology Margin Balance | Unit Baht | Description Loan amount | Formula |
Terminology Equity | Unit Baht | Description Customer Investment | Formula Cash + LMV - Margin Balance |
Terminology MM (Maintenance Margin) | Unit % | Description Customer's account margin rate | Formula (Equity ÷ LMV) × 100 |
Terminology IM (Initial Margin) | Unit % | Description Initial margin rate (The higher the risk, the higher the IM) | Formula |
Terminology CM (Call Margin) | Unit % | Description Margin rate that need to place additional collateral (The higher the risk, the higher the CM) | Formula |
Terminology FM (Force Margin) | Unit % | Description Margin rate that force to sell collateral (The higher the risk, the higher the FM) | Formula |
Terminology MR (Margin Required) | Unit Baht | Description Margin value based on margin rate (In case of securities with different risks, it must be calculated separately according to the risk group) | Formula sum of (LMV × IM) |
Terminology EE (Excess Equity) | Unit Baht | Description Surplus property (Able to purchase additional securities / withdraw collateral) | Formula Equity - MR |
Terminology PP (Purchasing Power) | Unit Baht | Description Purchasing Power (The higher the risk, the higher the PP) | Formula EE ÷ IM |
Terminology MM. Call Amt. (Maintenance Margin Call Amount) | Unit Baht | Description The value of the collateral that must be maintained if MM Force Amount < Equity < MM Call Amount then customer must bring additional collateral within 5 working days | Formula sum of (LMV × CM) |
Terminology Call Short Amt. (Call Short Amount) | Unit Baht | Description The value of the collateral that must be added - in case of Cash - in case of Collateral | Formula MM Call Amt. - Equity (MM Call Amt. - Equity) ÷ (1 - CM) |
Terminology MM. Force Amt. (Maintenance Margin Force Amount) | Unit Baht | Description Minimum collateral value that must be maintained if Equity < MM Force Amount then the customer is forced to sell the collateral on the next business day | Formula sum of (LMV × FM) |
Terminology Force Short Amt. (Force Short Amount) | Unit Baht | Description The value of the collateral required to be forced to sell in case of normal force sell (Force to Force) - in case of Cash - in case of Collateral | Formula MM Force Amt. - Equity (MM Force Amt. - Equity) ÷ FM |
Terminology | Unit | Description In case of forced sale due to non compliance with the Call letter (Force to Call) - in case of Cash - in case of Collateral | Formula MM Call Amt. - Equity (MM Call Amt. - Equity) ÷ CM |
