The Nigerian Exchange Limited (NGX) has proposed amendments to its Trading License Holders’ Rules, specifically targeting block divestments and large-volume trades. In a statement released over the weekend, the Exchange highlighted the need for updates to these rules to address emerging market concerns.
The current rules, which were first amended on February 12, 2018, include provisions on Block Divestments in Equities, Large Volume Trades in Equities, and the Disclosure of Changes in Beneficial Ownership of Shares. These rules were designed to guide the monitoring and reporting of share transfers that could significantly affect the daily trading volume and value, as well as material changes in the shareholding or control structure of issuers.
However, NGX noted that while reviewing applications and overseeing such trades, it had observed instances where some market participants appeared to be structuring transactions in ways that circumvented the rules’ disclosure and compliance requirements.
To address these concerns, the NGX is seeking feedback from various stakeholders on the proposed amendments. The changes, however, are subject to approval by the NGX Regulatory Council (RegCo) and the Securities and Exchange Commission (SEC).
