The Ghana Stock Exchange (GSE) has, with the approval of the Securities and Exchange Commission (SEC), amended its rules on
The amended rules are stated in Rule 30 of the newly approved Trading Rules and replaces Rule 22 of the GSE Automated Trading System (GATS) Rules.
According to the GSE, the objective of the amendment was to enhance stock price discovery and a fair market pricing.
GSE’s Rule 30 (Price Movement) of newly approved trading rules states that “For a security whose price is GH¢0.10 or above, the price change on a trading day shall not exceed plus or minus 10 per cent (10%) of the previous day’s closing price for the security.”
Another one is that for a security whose price was GH¢10.00 and above, the price might only change with a minimum volume of 500 shares, while the third one states that for a security whose price was below GH¢10.00, but greater than or equal to GH¢1.00, the price might only change with a minimum volume of 1000 shares.
The fourth rule was that for a security whose price was less than GH¢1.00, the price might only change with a minimum volume of 2000 shares.”The fifth reads that notwithstanding Rule 30(4) above, the price change on a trading day for a security whose price is below GH¢0.10
shall not exceed the previous day’s closing price of the security by “a tick” of GH¢0.01, while the sixth stated that this Rule 30 shall not apply to Negotiated Trades.
The Exchange has directed all Licensed Dealing Members to, with effect from June 15, 2020, apply and ensure that only orders equal or above the designated threshold for each group as stipulated in Rule 30 could change price within the price band of +/- 10% of the previous day’s price or VWAP; and also order volumes below the designated threshold in each group were to be priced at the current market price of that security.