The Tokyo Stock Exchange plans to expand the maximum daily allowable trading range for individual stocks in 2009 when it introduces a new computerized trading system, TSE sources said Sunday.
The bourse’s plan calls for expanding the range by up to 50 percent from current levels in a bid to attract more investors, the sources said.
Under the current rules, stocks priced between 1,000 yen and 1,500 yen can move up to 200 yen higher or lower than their last closing price. The TSE will allow such stocks to move 300 yen, the sources said.
Stocks valued from 3,000 yen to 5,000 yen will be able to move up or down 700 yen under the envisaged rules, instead of the current 500 yen range.
The daily allowable trading range is effective in protecting investors from wild fluctuation in share prices, but some institutional investors see the current range as too tight, the sources said.
Expanding the trading range would increase the burden on the TSE’s computer system, but the bourse will be able to cope with a possible hike in transactions with the upgrading of its system in 2009, they said.
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