NIGERIA: NGX Reiterates Commitment to Upholding Market Transparency Rules and Regulations

Wednesday May 17 2023

On 15^th May 2023, the Nigerian Exchange Limited (NGX) reiterated its commitment to support the enforcement of regulations that enhances transparency in the capital market, by reminding investors to comply with rules on disclosure of substantial holdings in listed companies. 

Recall a circular to the market recently in which NGX stated that lack of appropriate disclosures by investors was a breach of its rules and other extant market regulations. According to NGX, the act also impacted market transparency and fairness as it creates information asymmetry. This, according to experts, could hamper price discovery, regulatory oversight, and the accuracy of public disclosures. 

The circular reminded investors of Rule 17.13 of the Rulebook of the Exchange, Issuers’ Rules, 2015, titled “Disclosure of Changes in Beneficial Ownership of Shares” which requires every Issuer to notify NGX immediately; about any transaction that takes the beneficial ownership of its shares to five per cent (5%) or more not later than ten (10) business days after such transaction. 

The circular also quoted the Rulebook’s section on free float requirements, Rule 2.2 which states, “Each Issuer shall incorporate in its half-year financial statement filed with NGX its shareholding pattern, and also indicate whether or not it’s free float is in compliance with NGX’s free float requirements for the Board on which it is listed.” 

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