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NSE receives SEC’s approval to effect new rules/amendments

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The Nigerian Stock Exchange (NSE) has received the approval of the Securities and Exchange Commission (SEC) to introduce new rules and amend some existing ones.

While all the rules were approved by the Securities and Exchange Commission on Monday, May 6th, the NSE has enumerated the rules and the dates they are expected to take effect.

Below are the approved rules and the dates they will take effect:

  1.  Rules on securities transactions between dealing members of the NSE will become effective on Monday, June 3, 2019.
  2. Rules for listing on the Growth Board of the NSE will become effective on Monday, June 17, 2019.
  3. Rules governing free float requirements for the issuers that are listed on the NSE will become effective on Monday, June 3, 2019.
  4. Rules on price stabilisation of securities will become effective on Monday, July 15, 2019, and Rules on the release calendar for regulatory announcements and filings of listed companies, effective Monday, September 2, 2019.

Understanding free floats as stipulated in the new rule: Free float means the number of shares that an issuer has outstanding and available to be traded on The Exchange.

It includes all shares held by the investing public, and excludes shares held directly or indirectly by promoters, directors and their close relatives; strategic investors holding five percent and above of the issued share capital or government,” it said.

The rule states that for any issuer seeking to list on the Premium Board, its free float shall be: (a) 20 of the Issuer’s issued share capital made available to the public and held by not less than three hundred (300) shareholders; or (b) valued at N40 billion or more, or any value prescribed by the exchange from time to time, on the date The exchange receives the issuer’s application to list.

For issuer seeking listing on the Main Board, its free float must be 20 percent of shares held by not less than 300 shareholders or valued at N20 billion or more, or any value prescribed by the exchange from time to time, on the date the exchange receives the Issuer’s application to list.

For Alternative Securities Market (ASeM) Board, free float shall be 15 percent of the shares and held by not less than 51 shareholders of valued at N50 million.

The rule provides that The Exchange may grant an extension of time to an Issuer to comply with the minimum free float requirements if it believes that the market can operate fairly and in an orderly manner with the issuer’s existing level of free float.

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