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Alternative Market Briefing

Japan extends ban on restrictions on short-selling and purchase of own stocks by listed companies, again

Monday, January 25, 2010

From Precy Dumlao, Opalesque Asia

Japanese regulator Financial Services Agency (FSA) has extended restrictions on short-selling and purchase of own stocks by listed companies, the agency announced in a statement last Friday. The restrictions will be imposed until April 30, 2010.

This is the fourth time the FSA has extended these restrictions.

In a statement, the FSA said that the following rules would be extended: - Uptick rule requirement which prohibits short-selling at prices no higher than the latest market price; - Requirements that traders verify and flag whether or not their transactions are short-selling; and - Exchanges to make daily announcements of their total price of short-selling regarding all security and by sector.

At the same time, the FSA also extended the following rules until April 30 this year:

1) Naked short-selling (short-selling in which stocks are not borrowed at the time of selling) is prohibited; and

2) Holders of a short position of a certain level or more (in principle, 0.25% or more of outstanding issued stocks) are required to report this holding to exchanges through securities firms. Exchanges are required to publicly disclose such information.

The ban on short selling was first introduced in October 2008. In ......................

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