Nigerian bourse’s new par value rules take off Monday
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The Nigerian Stock Exchange (NSE’s ) amended par value and pricing methodology rules approved by the Securities and Exchange Commission (SEC) takes effect Monday, 29 January 2018
The rules specify the revised price limit, price movements and tick sizes, representing price floor, minimum pricing increments and minimum quantity to be traded, before the published price can be changed. The revised rules which would be implemented on bourse’s trading engine on the effective date also classify equity securities into different price groups in order to achieve this purpose.
“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 Abimbola Babalola, head, market surveillance and investigations department in a statement.at the weekend.
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 of the last six months, or new security listings that are priced below five naira (N5.00) per share at the time of listing on the bourse, Babalola explained.