The Nigerian Stock Exchange(NSE ), has aired 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) becomes effective this week.
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 Rules was implemented on NSE trading engine on this week.
“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