The Ghana Stock Exchange has, with the approval of the Securities and Exchange Commission, amended its rules on price movement. 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. The objective of the amendment is to enhance stock price discovery and a fair market pricing.
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 ten percent (10%) of the previous day’s closing price for the security.
- For a security whose price is GH¢10.00 and above, the price may only change with a minimum volume of 500 shares.
- For a security whose price is below GH¢10.00, but greater than or equal to GH¢1.00, the price may only change with a minimum volume of 1000 shares.
- For a security whose price is less than GH¢1.00, the price may only change with a minimum volume of 2000 shares.
- 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.
- 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 the following to trades:
1. Only orders equal or above the designated threshold for each group as stipulated in Rule 30 can change price
within the price band of +/- 10% of the previous day’s price or VWAP; and
2. Order volumes below the designated threshold in each group are to be priced at the current market price of that
security.
