September 22, 2008
Financial Services Agency

Statement by Toshimitsu Motegi, Minister for Financial Services, on ensuring market fairness for stabilization of international financial markets

  1. With continuing tension in the global financial and capital markets, our fellow regulators have adopted measures to ensure market fairness, including temporary introduction or strengthening of restrictions on short selling of shares in financial firms. The G7 statement, which has just been announced under joint coordination by the relevant countries, expresses their commitment to enhancing international cooperation.
  2. In this connection, Japan has already in place restrictions on short selling that target not only shares in financial firms but also those in all listed companies. In addition to requirements to verify and mark whether the transactions in question are short selling or not, there is an “uptick rule requirement” that short selling are prohibited, in principle, at prices no higher than the latest market price announced by the stock exchange concerned.
  3. The Financial Services Agency (FSA) will monitor market developments with heightened alert level, paying heed to international cooperation toward stabilizing, and protecting the integrity of, the international financial system. Furthermore, we will cooperate with the Securities and Exchange Surveillance Commission and the stock exchanges to conduct a thorough monitoring of market manipulation and other market abuse, and to take rigorous actions against violations, including stricter enforcement of restrictions on short selling of shares in listed companies, particularly those in financial firms.
  4. If, during the course of continued monitoring of market developments, we determine that further action is necessary from the standpoint of ensuring market fairness, the FSA is determined to take measures accordingly in a prompt and flexible manner.

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