Revisions to the Securities and Exchange Law concerning the prices for regulated short selling came into effect in Japan today. Until now, permissible prices for regulated short selling excluded anything below the prices most recently announced by the relevant exchange. For example, if a stock price was priced at Yen 1,000 yen, it could not be shorted at a lower price, buy it could be shorted at Yen 1,000.
The latest revisions mean traders may not conduct short sales unless the stock price is rising, because permissible prices for regulated short selling will exclude any sale at as well as below the current price. When the current price is greater than the previous price, short selling may take place at the current price, but not below it.