NSE Reviews Equities Market Structure to Improve Liquidity and Participation

The Nigerian Stock Exchange (NSE) has reviewed its Equities Market Structure, which shall become effective on Monday, July 2, 2018. The new Market Structure will create a level playing field for all market participants and enable investors deploy broader trading strategies, enjoy best execution and benefit from enhanced market depth.

The changes to the Market Structure include:

  • Opening and Closing Auctions to be followed by Imbalance Sessions (where bids exceed offers, and vice versa). These Imbalance Sessions allow market participants enter Imbalance Orders to address imbalances from the auction sessions.
  • Expansion of participants in the auction period to enhance fairness and competitiveness of the price setting mechanism.
  • Introduction of the size test condition in price determination during the auction period; as it currently applies during the continuous trading session.
  • Changes to the market price volatility mechanism such that daily Limit up Limit down (LULD) price band is now based on a single reference price (i.e., the previous day’s close) to allow for a symmetric up and down limit of 10% throughout the trading day.

Commenting on the new equities market structure, the Chief Executive Officer of the NSE, Mr. Oscar N. Onyema, OON, said, “the review of the equities Market Structure was carried out to support our hybrid market model which offers the benefits of best execution and tighter spreads to investors. Moreover, it provides potential for cheaper cost of capital to issuers in our market. This Market Structure is in line with our 2018 to 2021 corporate strategy aimed at boosting retail investor participation.”

The NSE remains committed to maintaining a platform that engenders a fair and efficient market in line with global standards.


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