The Financial Services Agency (FSA) has announced details of how it is to monitor short selling as part of its efforts to help stabilize the markets. The Agency also announced details of how it will ease restrictions on listed companies buying their own stock.
As part of the new regime, the FSA will ask securities exchanges to disclose more information on short selling as follows:
– Disclose the aggregate price of short selling regarding all securities.
– Disclose the aggregate price of short selling by sector (33 sectors in total).
– The information must be disclosed on a daily basis.
Previously, the FSA required only the disclosure of the aggregate price of short selling regarding all securities, on a monthly basis. The previous requirement for traders to verify and mark whether or not transactions are short selling, and the prohibition as a rule of short selling at prices lower than the market price announced by the stock exchange, remain unchanged.
Under a new Cabinet Office Ordinance, which will be effective from 14 October to 31 December, the following restrictions on listed firms’ purchase of their own stock will be loosened:
– The upper limit on volume of purchase per day will be lifted from 25% to 100% of average daily trading volume during the four weeks preceding the purchase.
– The rule that companies cannot buy their own stocks during the 30 minutes preceding the close of trading will be lifted.
For further information, please see the following:
http://www.fsa.go.jp/en/news/2008/20081014-1.htmlhttp://www.fsa.go.jp/en/news/2008/20081014-2.html
D.C.