Tokyo, Dec 06: Japan's Financial Services Agency said on Friday it had ordered the local brokerage unit of BNP Paribas, France's biggest bank, to halt stock trading on its own account from December 9 to 20 for violating securities rules. It is the latest in a series of administrative penalties involving exchangeable bonds (EBs) announced by Japanese regulators, who are stepping up surveillance of brokerages to bolster investor confidence in Tokyo's financial markets.

The action follows an inspection last week by Japan's securities watchdog, the Securities and Exchange Surveillance Commission.

The commission said the Japanese unit of BNP Paribas had conducted a series of transactions involving EBs to manipulate market prices.

EBs are high-risk, high-return structured bonds exchangeable for company stocks and are redeemed in cash with additional interest if the price of a selected stock is higher than a pre-determined price on a set date.

However, if the price is lower, they are redeemed with stock certificates.

Since July, the FSA has ordered the Tokyo branch of Bank of America Securities Japan, a unit of Bank of America, and second-tier brokerage Shinko Securities to improve operations in business involving EBs. Bureau Report