Japanese FSA extend short selling restrictions
24 January 2011 Tokyo
Image: Shutterstock
The Japanese Financial Services Authority has extended the temporary restrictions on short selling to April 30, 2011.
The following regulatory measures on short selling are currently in place, with regard to all listed stocks in Japan:
1) An "uptick rule requirement" which prohibits, in principle, short selling at prices no higher than the latest market price;
2) Requirements for traders to verify and flag whether or not the transactions in question are short selling; and
3) Request the exchanges to make daily announcements on their aggregate price of short selling regarding all securities and aggregate price of short selling by sector.
Regarding the purchase of own stocks by listed companies, taking into consideration the of situation Japan’s capital markets, the following restrictions have been temporarily relaxed over the period from October 14, 2008, to January 31, 2011:
1)Upper limit on the daily purchase volume
The limit will be raised from the current 25% to 100% of average daily trading volume during the four weeks immediately preceding the repurchase.
2)Timing of purchase
Companies are currently required to repurchase their own stocks during hours other than the 30 minutes immediately before the close of trading. This restriction will be lifted.
The following regulatory measures on short selling are currently in place, with regard to all listed stocks in Japan:
1) An "uptick rule requirement" which prohibits, in principle, short selling at prices no higher than the latest market price;
2) Requirements for traders to verify and flag whether or not the transactions in question are short selling; and
3) Request the exchanges to make daily announcements on their aggregate price of short selling regarding all securities and aggregate price of short selling by sector.
Regarding the purchase of own stocks by listed companies, taking into consideration the of situation Japan’s capital markets, the following restrictions have been temporarily relaxed over the period from October 14, 2008, to January 31, 2011:
1)Upper limit on the daily purchase volume
The limit will be raised from the current 25% to 100% of average daily trading volume during the four weeks immediately preceding the repurchase.
2)Timing of purchase
Companies are currently required to repurchase their own stocks during hours other than the 30 minutes immediately before the close of trading. This restriction will be lifted.
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