The Financial Services Agency said Tuesday it has again strengthened curbs on short selling of stocks to prevent investors from artificially bringing down the price of falling shares.
The new regulation bars investors from placing sell orders at a price lower than the stock's latest price when prices in the market are generally heading downward.
The restriction concerns share transactions in which investors sell shares they do not own by borrowing them from securities financing companies. Investors can profit if they manage to buy the same stock later at a lower price, after driving down the stock price with a massive sale. The investor then returns the borrowed shares and pockets the difference.