The Japanese Financial Services Agency has extended restrictions on short selling until March 31, 2009.
The FSA has put in force the following temporary measures:
– Naked short selling (short selling in which stocks are not borrowed at the time of selling) is prohibited (effective since October 30, 2008); and
– Holders of a short position of a certain level or more (in principle, 0.25% or more of outstanding stocks) are required to report to exchanges through securities firms. Exchanges are required to publicly disclose such information (effective since November 7, 2008).
The following regulatory measures on short selling are already in place as permanent measures, with regard to all listed stocks in Japan:
– An “uptick rule requirement” which prohibits, in principle, short selling at prices no higher than the latest market price;
– Requirements for traders to verify and mark whether or not the transactions in question are short selling; and
– Request on exchanges to make daily announcements on their aggregate price of short selling regarding all securities and aggregate price of short selling by sector (The announcements have been made sequentially since October 14, 2008).