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The Nigerian Stock Exchange (NSE) will begin implementation of the amended market rules from the 2nd of July, 2018. The bourse had some months ago, released the draft rules to the public for scrutiny.

Here are highlights of the rules:

Amended rules for the Equities Market

  • Pre-open auction time has been reduced by 10 minutes to run from 9.30 am to 10 am.
  • All market participants can take part in this session.
  • Continuous trading now starts from 10 am and ends 2.20pm.
  • Pre-open adjust session and Pre-close adjust session will be removed.
  • Pre-close session added. This session will last for 10 minutes and all market participants can take part.

Imbalance Session

  • As part of the pre-open, 5 minutes imbalance session is now included to address imbalances at the open and close.
  • A buy/sell imbalance indicates the existence of more orders to buy/sell at the theoretical price to be filled than there are offsetting sell/buy orders.
  • Imbalance order type is received during this session on the other side of the imbalance to add liquidity.
  • Imbalance orders are limit type orders and have the least priority during uncrossing.
  • Theoretical Price/Volume and Imbalance indicators will be displayed from the beginning of imbalance session.
  • During Imbalance Order session, existing orders can be amended but not deleted.
  • Order amendment is only allowed for orders on the side of the book which will address the order imbalance.
  • The new price of the amended order can only be priced at TOP or better (Price Improvement).
  • Imbalance orders can be priced at or better than theoretical price and can participate in determining the theoretical price.
  • If auction book is empty, there is no imbalance, imbalance order entry is not allowed.


  • Agency traders and market makers can participate in all sessions.
  • No market participant has prior view of order book.
  • Market makers no longer have the sole view of adjust sessions to address imbalance.

Minimum Trade Quantity

  • Size Test under pricing methodology rule now applies across all sessions including auctions.
  • There must be at least one potential trade that meets the Minimum Market Trade Quantity threshold in order for the Theoretical Opening Price and Theoretical Opening Volume to be set during the auction.

Price movement 

  • The maximum Daily Upward movement is now 10% as against 10.25% in the previous structure.
  • Maximum Daily Downward Movement now 10% as against 9.75% in the previous structure.
  • NSE is introducing the NSE Official Open/Close Price (NOOP). The NOOP/NOCP is established from the opening/closing match, i.e.the Open/close price is not set to the Previous Close Price/Last Sale Trade.

ETF Market Structure

  • The maximum price movement in one day is now 10% for Equity backed ETFs only.
  • The maximum downward price movement in one day is 10% for Equity backed ETFs only.
  • For all others, there is no limit on movement.

Fixed Income 

  • All auction periods have been removed and the Fixed Income market opens at 10 am and trades until the close of the market at 2.30pm.
Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com


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