As an Exchange that champions transparency and equity for all stakeholders in our market, we have received stakeholder feedback concerning our present rules on cross dealing and will consider the issues raised as part of our sustained efforts to ensure our market remains equitable for all stakeholders. We believe in market forces as the most efficient methodology for price discovery. Demand and supply will interact to discover appropriate prices as trading activities continue in the market.
There appears to be a misconception that a concession was given to MTN Nigeria on the minimum free float required for companies listed on The Exchange. According to Rulebook of The Exchange, free float is defined as 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 (5%) and above of the issued share capital; or government.
The Exchange’s rules for listing on the Premium Board (which is the board in which MTN Nigeria is listed) require a Company to have a minimum free float of twenty percent of its issued share capital or that the value of its free float is equal to or above N40 billion on the date The Exchange receives the Issuer’s application to list. MTN Nigeria met with the free float requirement of N40 billion. The free float of MTN at the time of listing was in excess of N90 billion. Our rules are readily available on the website of The Exchange at www.nse.com.ng.
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Investor protection is very important to us at The Exchange and we have taken necessary steps to ensure that our market is fair and orderly. In 2016, we acquired NASDAQ’s SMARTS platform to proactively detect and deter manipulative tendencies, gather intelligence and execute risk based supervision of flagged participants. We have also implemented other initiatives aimed at providing investors with timely information on the compliance status of our Dealing Members and Issuers including BrokerTrax, our member compliance report, and Compliance Status Indicator (CSI) codes (for Issuers). In addition, we have institutionalized our investor education program and launched X-Academy in June 2017, because we have identified investor education as a veritable tool to galvanizing informed investments and necessary step towards protecting investors in our market.
Whilst we believe we have addressed the concerns raised, we will like to assure our stakeholders and the general public that The Exchange will continue to uphold global best practices in its business operations and will sustain engagement with its stakeholders to continually develop regulatory frameworks that ensure our market completely reflects our values of ambition, fairness and inclusion.