SECTION 228/1.⁴ The use of securities deposited with the Securities Exchange as collateral for a repayment of debt, which is not the case under Section 195, shall be valid and binding to the issuing company and the third party when the Securities Exchange has entered a record in an account prepared in accordance with the rules, conditions and procedures as specified in the notification of the Securities Exchange, with the Capital Market Supervisory Board’s approval.

Prior to the enforcement upon securities which have been held as collateral under the first paragraph, a creditor shall notify the debtor and the person placing the collateral in writing requiring him to make such repayment within a reasonable period of time. If the debtor and the person placing the collateral fail to comply with such notice, the creditor shall have the right to sell such securities on the Securities Exchange in accordance with the procedures specified by the Securities Exchange or by auction.

The provisions concerning pledge under the Civil and Commercial Code shall apply to the extent that they are not contrary to or inconsistent with the provision of this Section.

The creditor who accepts securities as collateral for a repayment of loan under the first paragraph shall have a preferential right in such securities, in a manner similar to the pledgee.

SECTION 228/2.⁴ The provisions of Section 225, Section 226, Section 227, Section 228 and Section 228/1 shall apply mutatis mutandis to the securities depository center which obtains license from the SEC, provided that, it shall be solely for the deposit of debt securities.

SECTION 229.⁴ In cases where the operation of a clearing house, a securities depository center or a securities registrar is undertaken by the Bank of Thailand, no license from the SEC shall be required. In this regard, the Board of Governors of the Bank of Thailand shall have the power to prescribe the rules, conditions and procedures for such operations.

For the purpose of the first paragraph, the provision of Section 225, Section 226, Section 227, Section 228 and Section 228/1 shall apply mutatis mutandis. In cases where those provisions specify the powers and duties of the Capital Market Supervisory Board, such provisions shall be deemed as the powers and duties of the Board of Governors of the Bank of Thailand and the Securities Exchange under those provisions shall mean the Bank of Thailand.

DIVISION 2
ASSOCIATIONS RELATED TO SECURITIES BUSINESS

SECTION 230. Securities companies may jointly establish an association related to securities business with an object of promoting, without seeking profit or sharing income among themselves, securities business, only by virtue of the provisions of this Act.

SECTION 231. The establishment of an association related to securities business shall require a license from, and be registered with the SEC Office.

SECTION 232. In applying for a license and for registration, not less than fifteen securities companies who are the founders of the association shall submit the application to the SEC Office in accordance with the rules and procedures as specified in the notification of the SEC.

In considering the application for the establishment of an association related to securities business, the SEC Office shall have the power to issue a written order summoning any person to come forward for an enquiry or requiring the delivery of any documents.

SECTION 233. The licensed and registered association related to securities business shall be a juristic person.

SECTION 234. An association related to securities business shall have its regulations and such regulations shall at least contain the following particulars:
(1) name;
(2) object;
(3) location of the office;
(4) procedures for admission, rights and duties of members;
(5) disciplines and punishment of members;
(6) the operation of the association related to securities business, appointment and vacation of office as well as the meetings of directors including general meetings;
(7) other regulations as specified in the notification of the SEC.

Regulations of an association shall be submitted for registration with the SEC Office together with the application for a license to establish an association related to securities business.

Prior to the granting of a license, if the SEC Office deems appropriate, it may order the alteration and modification of the regulations.

SECTION 235. Members of an association related to securities business shall only be securities companies.

SECTION 236. The name of an association related to securities business shall be the name as appears in the regulations only, and the name shall not use the phrase “of Thailand” or any other phrases with similar meaning constituting the name of the association related to securities business.

The association related to securities business shall have a clearly stated name plate placed in front of its office.

SECTION 237. Relevant provisions in the law relating to trade associations concerning the operation, control, dissolution and the related penalty provisions shall apply mutatis mutandis to the extent that they are not contrary to or inconsistent with the provisions of this Division. In this regard, the word “SEC” shall be substituted for the word “Minister”, the word “SEC Office” for the word “registrar”, the words “association related to securities business” for the words “trade association” and the powers and duties of a competent officer in accordance with the law relating to trade associations shall be the powers and duties of a competent officer under this Act.

CHAPTER 8
UNFAIR SECURITIES TRADING PRACTICES AND THE ACQUISITION OF
SECURITIES FOR BUSINESS TAKE-OVERS

DIVISION 1
PREVENTION OF UNFAIR SECURITIES TRADING PRACTICES

SECTION 238. No securities company or any person responsible for the operation of a securities company or company which issues securities or any person having an interest in the securities shall impart any false statement or any other statement with the intention to mislead any person concerning the facts relating to the financial condition, the business operation or the trading prices of securities of a company or juristic person whose securities are listed in the Securities Exchange or are traded in an over-the-counter center.

SECTION 239. No securities company or any person responsible for the operation of a securities company or company which issues securities or any person having an interest in any securities shall disseminate news concerning any information which may cause any other person to understand that the prices of any securities will increase or decrease, except where the dissemination of information has already been reported to the Securities Exchange.

SECTION 240. No person shall disseminate any false news to be remoured which may cause any other person to understand that the price of any securities will increase or decrease.

SECTION 241. In the purchase or sale of securities which are listed in the Securities Exchange or traded in an over-the-counter center, no person, whether directly or indirectly, shall purchase or sell, offer to purchase or sell or invite any other person to purchase, sell or offer to purchase or sell securities which are listed in the Securities Exchange or traded in an over-the-counter center in such a way as to take advantage of other persons by using information material to changes in the prices of securities which has not yet been disclosed to the public and to which information he has access by virtue of his office or position, and whether or not such act is done for his own or another person's benefit, or to disclose such information so that he will receive consideration from the person who engages in the aforesaid acts.

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4. indicated amendment by the Securities and Exchange Act (No. 4) B.E. 2551