(Provisional Translation)
February 6, 2002
Financial Services Agency

An administrative action against Barclays Capital Japan Ltd., Tokyo Branch

  1. The Securities and Exchange Surveillance Commission(SESC) conducted the inspection of Barclays Capital Japan Ltd., Tokyo Branch, (''the Branch'' hereafter), and found the following legal violations of the Securities & Exchange Law. (The SESC notified the findings to the Branch on January 30, 2002).
  • Short-selling in breach of Securities & Exchange Law
    During the period from January 2001 until November 2001, the Branch executed short-selling of stocks by clients' order without legally required disclosure of the fact of short-selling to the stock exchanges many times because staffs misunderstood an order-system and so on. And the Branch made a short sale at a price lower than the latest published price prior to the short sale.

    The conduct above was found to violate the Article 26-3 (1), the Article 26-4 (1) of the Cabinet Order (Securities & Exchange Law) and Article 162 (1) (i) of the Securities & Exchange Law, both of which regulate short-selling. And a defect was found in the internal control.
  1. On the basis of the above findings, the FSA issued the following orders to the Branch:
  • Improve the compliance with the Law
(1) Strengthen the internal control system, secure strict compliance by the directors and staff, take preventive measures against recurrence of the above mentioned violation and clarify locus of responsibility.
(2) Work out concrete measures to root out short-selling in breach of the Law including a target date.

For further information, please contact with the following:

Securities Business Division
Supervisory Bureau
FSA, JAPAN (Tel : 03-3506-6000)
Deputy Director : Atsushi SASAGAWA(ex.3370)
Section Chief : Yoshikazu HIRAI(ex.3356)

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