UPDATE 1-Japan to curb short-selling ahead of public offerings

* Aimed at curbing excessive short-selling before offerings

* Regulatory changes expected to made in 2011 (Adds background)

TOKYO Dec 24 (Reuters) - Japan's Financial Services Agency said on Friday it would ban purchases of newly issued shares by those who short-sell shares in an issuer before the offering price is set.

The move is designed to curb excessive short-selling by investors looking to profit by driving a stock down in the run-up to a share offering.

It comes amid growing scrutiny in Japan of short-selling and other speculative trades before and after the announcement by companies of new share offerings, including the recent launch of a probe into insider trading. [ID:nTOE69S0C9]

The FSA said regulatory changes would be made as early as in the first half of the next fiscal year starting in April.

The new rule is similar to Regulation M in the United States, which prohibits anyone from taking a short position during a restricted period after the announcement of a public offering and then buying that same stock in the offering. (Reporting by Noriyuki Hirata; Writing by Taiga Uranaka)