Politics & Regulation

Japanese regulatory body extends short-selling ban


Japan’s Financial Services Agency has again extended short-selling restrictions to 31 January 2011, following the launch of an investigation by the Securities and Exchange Surveillance Commission and the Tokyo Stock Exchange (TSE) into irregular trading in the new issue market.

The rules, which include a ban on naked short selling, were initially imposed in 2008, extended the following year, and were due to end on 31 October.

The TSE is examining a trading strategy – believed to be used by hedge funds – where investors, acting on a tip from an insider at a listed company, short-sell the