Today, Osaka Securities Exchange (hereinafter "OSE") imposed the disciplinary action on Barclays Capital Japan Limited (hereinafter the "Firm") pursuant to Rule 42(1)(ix) of the Regulations for Transaction Participants as follows.
Additionally, OSE requested the submission of a business improvement report pursuant to Rule 17 of the said Regulations.
The business improvement report shall include:
(1) Reestablishment of the internal control system, including the management of the electronic data processing systems through pursuing the cause of this violation of laws, rules and regulations and introducing preventive measures against recurrence of the violation;
(2) Implementing training, etc. of all officers and employees in order to foster the proper understanding and compliance with the laws, rules and regulations; and
(3) Clarification of the locus of responsibility in light of the disciplinary action.
1. Disciplinary Action
As for the following the Firm's act and condition, OSE imposed a fine of JPY 20 million on the Firm.
* (1) Short-Selling in breach of the Financial Instruments and Exchange Act (hereinafter the "FIEA")
* (2) Inadequate management of the electronic data processing systems for the financial instruments business
2. Reason for the Disciplinary Action
* (1) The firm's act is found to be a violation of Article 26-3(1), Article 26-4(1) of the Cabinet Order for Enforcement of the FIEA, based on the Article 162(1)(i) of the FIEA, both of which regulate short-selling.
* (2) The firm's condition is considered to be "the state that the firm is not deemed to have a sufficient degree of control of electronic information processing system relating to securities dealers" as defined in Article 123(1)(xiv) of the Cabinet Office Ordinance for the Financial Instruments business, based on the Article 40(2) of the FIEA.