January 26, 2018 /6:35 PM /NSE
The Nigerian Stock Exchange (“NSE” or “The Exchange”), hereby restates that the amendments to Pricing Methodology and Par Value Rules, which can be found in Rules 15.29 and 15.30 respectively of the Rulebook of The Exchange, 2015 (Dealing Members’ Rules) (“the Rules”), which have been approved by the Securities and Exchange Commission (SEC) shall become effective on Monday, 29 January 2018.
The Rules specify the revised price limit, price movements and tick sizes i.e. price floor, minimum pricing increments and minimum quantity to be traded that will change the published price. The Rules also classify equity securities into different price groups in order to achieve this.
This revised Rule will be implemented on The Exchange’s trading engine on the effective date.
“The amended stratification of price movements, price limits and tick sizes aims at improving liquidity, narrowing spreads, and ensuring that all price improving (up/down) transactions are material, making the market more efficient for all participants”, said Mr. Abimbola Babalola, HoD Market Surveillance and Investigations Department.
In order to achieve the aforementioned aims of improved liquidity, narrowed spreads, material price improvements, and market efficiency, the amendments to the Pricing Methodology Rule included the introduction of a new price group – “Group C”. It should be noted that the new Group “C” consists of equity securities that are priced below Five Naira (N5.00) per share, for at least four (4) of the last six (6) months, or new security listings that are priced below Five Naira (N5.00) per share at the time of listing on The Exchange.
Specifically, the new price groups, price limits, tick sizes, and minimum trades’ quantity required to change prices for equity securities traded on The Exchange are shown in the table below:
Market participants are also informed that the new Par Value Rule specifies that the price of every share listed on The Exchange shall be determined by the market forces and equities may now trade below the erstwhile price floor of fifty Kobo (N0.50) per unit.
Therefore, traders are required to ensure that as from the above stated effective date, all open and subsequent priced orders in equity securities comply with the amended requirements for each price Group of equities and in approved minimum increments accordingly.
Investors are advised to contact their Stockbrokers to ascertain whether any of their open orders, will be impacted by this amendment.
For further enquiries or clarifications on these amendments, kindly refer to the responses provided in the FAQs and Interpretative Guidance available on The Exchange’s website www.nse.com.ng or contact our Contact Centre on email@example.com; or our Market Surveillance & Investigations Department on Market_Surveilance@nse.com.ng.