Published On: Fri, Apr 26th, 2013

Japan FSA Extends Temporary Measures to Restrict Short Selling

Financial Services Agency (FSA) has recently proposed revisions to the short selling regulation and on measures to relax the restrictions on share buybacks (see press release dated 1 April 2013). As these revisions are expected to be implemented by around November 2013, the existing temporary measures as listed below, due to expire on 30 April 2013, will be extended until 31 October 2013. Cabinet Office Ordinances and FSA Regulatory Notices to extend these measures are expected to be issued by the end of April 2013.

Short selling regulation

1) Prohibition of naked short selling (short selling without ownership or arrangement to borrow shares at the time of sale)

2) Reporting and public disclosure regime for short positions equal to, or exceeding, 0.25 percent of the issued shares in principle
Measures to relax restrictions on share repurchases by publicly listed companies

1) The daily maximum repurchase volume allowed was relaxed, from 25 percent of the average daily trading volume over the four week period immediately preceding the repurchase, to 100 percent.

2) The rule prohibiting companies from repurchasing their own shares during the last 30 minutes of the trading close, has been lifted.

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