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Restrictions on Margin Trading and Loans for Margin Trading

Restrictions on Margin Trading

If there is excessive use of margin trading, TSE will raise the security deposit rate in order to limit the exercise of new margin trades.

The implementation and removal of measures to restrict margin trading in individual issues is conducted in accordance with the "Guidelines Concerning Measures to Raise the Security Deposit Ratio, etc."

Guidelines Concerning Measures to Raise the Security Deposit Ratio, etc.
 

For issues subject to restrictions on margin trading, please see the page below.

Regulatory Measures, etc., Concerning Margin Trading
 

Restrictions on Loans for Margin Trading

Securities finance companies lend funds or stocks to securities companies for standardized margin trading (this is known as "loans for margin trading").

If the number of applications to borrow stocks to sell on margin in a particular issue increases due to an increase in sales through standardized margin trading or another reason, and these exceed the number of applications for loans to buy the same issue on margin, the securities finance company procures the excess by borrowing stocks from securities companies and outside shareholders.

When procurement of stocks seems likely to become difficult for a certain issue due to, for example, an increase in applications to borrow stocks, securities finance companies will issue an alert to securities companies. If procurement of stocks becomes difficult for a certain issue, they will restrict or suspend applications from securities companies to borrow stocks.

These measures are taken against securities companies and do not directly restrict investors from using margin trading. However, since most securities companies procure stocks through securities finance companies, if applications to borrow shares for margin trading are suspended, it is likely that new sales through standardized margin trading will become difficult.

Investors are advised to be aware that securities companies may restrict or suspend the use of standardized margin trading (new sales, actual receipt, and resales) for issues subject to such measures.

For details, please refer to the website of Japan Securities Finance Co., Ltd. (JSF).

List of Issues Subject to Restrictions (JSF website, only available in Japanese)icon-block