NSE defers trading halts due to extraordinary market volatility

The Nigerian Stock Exchange (NSE) yesterday notified that it has deferred the effective date of Article 170 of the “Rules and Regulations Governing Dealing Members”, titled “Trading Halts Due to Extraordinary Market Volatility.”

In the notice signed by Tinuade T. Awe, head, legal and regulation division, NSE said Article 170 was no longer effective on December 1, 2014 as previously announced, adding that “The Exchange will announce the effective date of Article 170 on a later date.”

Article 170: Trading Halts Due to Extraordinary Market Volatility (Index Circuit Breakers) provides that: the Exchange shall halt trading in all stocks and shall not reopen for the time period specified in this Rule if there is a Significant Market move in either direction.

It also provides that for purposes of this Rule, a significant market move means a 5 percent move in price of the All Share Index between 10:15am and 13:45p.m. on a trading day as compared to the closing price of the All Share Index for the immediately preceding trading day.

On halts in trading, if a market move occurs after 10.15am and any time up to and including 13.45pm, the Exchange shall halt trading in all stocks for 30 minutes. The Exchange shall not halt trading if a Significant Market move occurs after 13.45pm The Exchange shall halt and reopen trading based on a Significant Market move only once per trading day.

If, following the reopening of trading after a Significant Market move halt, the All Share Index moves further by a minimum of 5 perccent below its closing value on the immediately preceding trading day, during any trading day The Exchange will halt all trading for the remainder of the day.

The last traded price in any security prior to the closing of the market shall be deemed the closing price in such security for the day. On re-opening of trading: the re-opening of trading following a trading halt shall follow the procedures as may be set forth by the Exchange.

“Nothing in this Rule shall be construed to limit the ability of the Exchange to otherwise halt, suspend, or pause the trading in any stock or stocks traded on the Exchange pursuant to any other Exchange rule or policy,” NSE said in the notice.