The NASD OTC is set to introduce a price band of 15 percent (either upward or downward) from daily opening price.
The price band will be effective from February 2, 2015, and all participating institutions will execute mandates within the 15 percent bands.
The introduction of price bands comes after a free pricing regime which existed in the first 18 months of the NASD OTC market.
“In the interim, participating institutions can still execute existing mandates along lines agreed with their clients,” the NASD noted recently.
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Bola Ajomale, managing director, NASD plc, said that in 2013, “we built structures that will support a robust OTC market (such as processes, on-boarding participants and developing rules). In 2014, we populated the market with instruments opening trades. In 2015, we expect to broaden the scope of the market in products and clients. We also expect a deepening in the market in terms of deal size and dematerialisation levels.”
As of the end of 2014, NASD OTC market had nominal value of N41 billion and total market capitalisation of N590 billion.
Total number of issued shares that can trade on the market is put at 83 billion shares. Dematerialisation levels were still low at 2.05 billion shares or 2.48 percent.
No fewer than 120 million shares worth N2.32 billion were exchanged in 417 deals by investors on the NASD OTC market from January to December 2014, compared with 239,165 shares worth N76 million that were exchanged in 34 deals from July to December 2013.
