Trading Related Questions

1I am interested in an admitted security on the NASD OTC Securities Exchange. How do I trade the Shares of the Issuer?
You can buy or sell the shares of any security trading on the NASD OTC Market through your appointed Participating Institution .
• BUY:
  • Create a trading account with CSCS PLC [“The CSD”] through the Participating Institution.
    Please click here to see the list of licensed Participating Institutions.
  • Issue a Buy Mandate to the Participating Institution with the accompanying financial requirements
• SELL
  • If you have an existing CSCS account and the certificate is dematerialised, simply issue a sell mandate to your Participating Institution
  • If not, create a trading account with CSCS PLC [“the CSD”] through a Participating Institution. .
  • Liaise with the Participating Institution to dematerialize the certificate with the Registrar to the Issuer.
  • Issue a sell mandate. Please click here to see the list of licensed Participating Institutions..
2Current list of admitted securities on the NASD OTC Securities Exchange?
We currently have 38 securities trading on the NASD OTC Market. Click here to see the list of admitted securities.
3What type of security can be admitted on the NASD OTC Securities Exchange?
The shares of a public unquoted company that is not listed on any other exchange is qualified to be admitted. Please note that the company must be SEC Registered.
4Costs associated with trading on the NASD OTC Market?
Your appointed Participaing Institution would charge a commission per deal. Click here to view licensed Particpating Institutions.
5How can I view trades executed on NASD OTC Market?
Trades summary are published and can be viewed on the NASD OTC Securities Exchange official website. To view historical market data, click here to subscribe to the NASD Data Portal.
6How else can I contact NASD OTC Securities Exchange?
Kindly click here to enable NASD PLC contact you directly.

About NASD Plc

1What is NASD PLC?
NASD PLC is a Securities Exchange registered by the Securities and Exchange Commission [“SEC”] to operate a formal Over-The-Counter [“OTC”] market in Nigeria. The acronym NASD was derived from the company’s origin - the "National Association of Securities Dealers".
2What service does NASD PLC provide?
NASD PLC provides a regulated market place for OTC transactions [the “NASD OTC Market”] where all instruments not listed on a registered Exchange but duly registered by the Securities and Exchange Commission can be traded through licensed Participating Institutions. It also provides an avenue for shareholders to trade securities of unquoted public companies; and a centralised source of information and price discovery on unquoted public companies.
3What is the NASD OTC Market?
The trading platform is an electronic inter-dealer quotation system that displays historical price data, current price quotes, and market depth information on all long term securities registered by the Securities and Exchange Commission but not listed on any other exchange in Nigeria. The official name for the NASD OTC Securities Exchange trading platform is – Bilateral Inter-Dealer Trading System [“BiTS”]. The platform provides an avenue for securities to be traded without the issuer being admitted thereby providing more transparency; and ultimately liquidity to the shareholder and the capital market in general.
4What is the ownership structure of NASD PLC?
NASD PLC is currently owned by fifty-nine (59) capital market operators in Nigeria and has an authorized Share Capital of N500 Million. Being a public quoted company, the shares are freely transferable to any interested investor and may be traded on the NASD OTC Market upon availability.
5Who regulates the NASD OTC Market?
The NASD OTC Securities Exchange is a Self-Regulatory Organization [“SRO”].
6NASD PLC facilitates internet trading, what security is in place to protect the integrity of the deals?
The BiTS platform has encrypted login access, security certificates, clustering and replication of environment for continuous market availability.
7Who are the operators of the NASD OTC Market?
» Broker, Broker/Dealers and Custodians are licensed with NASD OTC Securities Exchange to introduce securities and make market (either buy or sell)..

» Accredited Issuing Houses are licensed with NASD OTC Securities Exchange to provide financial and Investment advice to Issuers about participating on the NASD OTC Market.

» 6 Settlement banks act on behalf of the Broker, Broker/ Dealers to ensure that all deals are settled and paid for on the appropriate transaction date.

» Central Securities Clearing System [“CSCS”] is the central depository for NASD OTC Market and ensures completion on delivery of transactions.
8What are the official trading hours on the NASD OTC market?
Trades can be executed on NASD OTC market between the hours of 10.00 a.m. and 3.00 p.m. on weekdays (with the exception of public holidays)
9What rules guide execution of transaction on NASD OTC market?
The rules and regulations of the NASD OTC market are designed to protect investors, regulate the activities of Participating Institutions and create an orderly environment for efficient trading of unquoted public securities. The NASD OTC Market rules are avaiblable . here
10What are the benefits of trading on the NASD OTC market?
» Transparency in trade which enhances investors’ confidence

» A centralized platform for price discovery

» A source of long-term funding for companies

» Access to broad range of asset classes

» Access to specialized market data

» Innovation of new and unique investment solutions

» Increased corporate visibility

» Improved investor / Shareholder relations

Security and Company Admission Related Questions

1What are the admission requirements?
The requirements for admission on the NASD OTC Securities Exchange is available on the official website here
2Introduction of Securities to the NASD OTC Securities Exchange?
Securities can be introduced either by the company or by individual shareholders. Where the securities are introduced by the Company, the Board of the Company shall undertake to comply with NASD OTC Market rules and provide any information as may be reasonably required by NASD PLC. This is known as "Company Admission".

Where the security is introduced by Shareholders who wish to trade his/her holdings of unquoted public companies. This is referred to as "Security Admission". This is done through a licensed Participating Institution; the company has no obligation to NASD PLC.
3Time frame for admission of Securities to trade on NASD OTC Securities Exchange?
Admission is completed between two to four weeks (subject to compliance with the NASD OTC Market Rules and fulfillment of all admission requirements).
4How Are Prices Of Securities Determined On The NASD OTC Market?
Prices are determined by demand and supply. Investors are advised to appoint Participating Institution who can analyse the Company’s financials and advise on appropriate bid and offer values for securities of interest. Where bids exceed offers, the price of the security may rise and where offers exceed bids, the price may be expected to fall to a level where a deal may be struck.
5Is there a free float requirement on the NASD OTC Market?
There is a 10% free float requirement for admitted companies. No such requirement exists for admitted securities
6How will NASD monitor trade activity on the OTC market?
NASD's administrative control facility carries out surveillance on market activities. Traders' activities are actively monitored both on and off the trading platform.
7Are there penalties for defaulting participating institutions?
The integrity of the market is critical to the continued growth of the OTC market in Nigeria. Defaulters will face sanctions, fines and/or suspension from trading as may be imposed by the NASD Disciplinary Committee.
8How are trade disputes settled by NASD?
NASD has established a Disciplinary Committee to handle disputes arising from dealings on the OTC market and have put in place rules and regulations guiding market activity. Investors can submit complaints or report any market infraction directly to NASD or via email to whistleblowing@nasdng.com.

The Disciplinary Committee investigates all complaints received before arriving at a decision.
9What is a public unlisted equity?
A public unquoted equity stock is a unit of share of a public limited company [“PLC”] that is not quoted on the board of any registered Exchange in Nigeria. It is commonly referred to as “shares”.
10What if the security of a public company is not registered with Security and Exchange Commission?
Section 54 (1) of the Investment and Securities Act states that "All securities of public companies and all Investments of a collective investment scheme shall be registered with the Commission under the terms and conditions contained herein". Accordingly, NASD will not trade the securities of public companies that are not registered with the Commission. Such securities contravene investment laws, attract penalties and may expose the investor to undue risk.

The issuer of such securities should immediately register the securities with the Commission. Once the Commission has registered the securities, they can then be traded on the NASD OTC market.

Market Data Related Questions

1How will trades on the NASD OTC Market be settled?
All trades are settled through the Central Securities Clearing System [“CSCS”] on T+3 basis (i.e. Transaction date plus three days).
2Will price movements be restricted to a daily percentage on stocks?
Yes. NASD operates a 15% +/- price bands as prices will be determined solely by the forces of demand and supply.
3How can investors monitor price movements on NASD OTC Market?
Price movements are documented in the market index. Daily movements are also available on the market ticker on our website. The Daily Market summary highlights the volumes traded and the deal prices.

Others

1What is the difference between transfer and trading?
Transfer and trading refers to the same thing, both words connotes change of ownership of a share certificate.
2Can securities listed on other exchanges be traded on NASD OTC Market?
Securities listed on a registered Exchange can not be traded on NASD OTC Market
3What happens when a security that was trading on the NASD OTC Market gets admitted on another Exchange?
By default all securities of public companies not quoted on another Exchange qualify to be traded on the NASD OTC Market. Once a security has been approved for admission on another Exchange, that Exchange will notify NASD. Upon receipt of this written notification, NASD will immediately cease trading on that security and discharge the security from the NASD OTC Securities Exchange.
4Where can I get the Pricelist of securities trading on NASD OTC Market?
You can get the Pricelist of securities trading on NASD OTC market from our website under the heading “Daily Market Summary”. View price list here
5Does NASD act as a central counter party?
No, NASD is an organised market that provides a platform where all unquoted securities can be traded between sellers and buyers on behalf of the investors. All trades on the platform are executed by NASD licensed Participating Institutions.
6Does NASD invest directly in instruments traded on its platform?
No. NASD Plc is a neutral operator in the financial markets. It only provides platforms for trades to be executed.
7How are corporate actions of admitted securities communicated to stakeholders?
Corporate actions of admitted securities are announced on the website. As an OTC market, we do not intervene in valuation and pricing but shall make all information necessary for appropriate pricing available to the public.
8Can admitted securities be used as collateral?
Yes. Lenders will be pleased to learn that OTC trading stocks qualify for lien arrangements. NASD provides universally acceptable prices as a reference while the CSCS will hold dematerialised shares according to the terms of the borrower / lender agreement. For a full list of NASD OTC licensed Particpating Institutions who can structure your lien arrangement. Click here to view a list of licensed Particpating Institutions.
9How can I verify my share certificate?
i. Instruct a licensed Particpating Institution to verify signature and open a depository account with CSCS.

ii. The Particpating Institution will attach the certificate with a duly signed transfer form and send to the Company’s Registrar for verification.

iii. The Registrar will verify the signature securing the certificate and confirm the Investor's holding. Once verified, the Registrar will send a book entry of the Investor’s holding to the depository account held in CSCS

iv. CSCS will credit the Investor’s account with the units of shares verified and the Participating Institution can offer to sell the amount credited at the start of the next trading day.
10What is dematerialization?
This is a process in which physical share certificates are converted into electronic format and domiciled with a registered depository. CSCS is officially the only company that provides depository services to the Nigerian capital market. Share certificates must be converted into electronic form before they can be traded on the NASD OTC Market.
11Do I need to open a separate CSCS account for NASD OTC Market?
Yes, you need to open a CSCS account for transactions on NASD OTC Market. Simply contact any of our licesned Participating Institutions and a new account will be created with CSCS.
12To whom do I take my share certificates for dematerialization?
Take your share certificates to a licensed Participating Institution of the NASD OTC Securities Exchange
13Why do I need to sign in two places on the NASD transfer form?
You need to sign in the two specified places to cover both verification and dematerialisation of the certificate into your CSCS account.
14If I have not received my share certificate from the issuer/company what should I do?
Your Participating Institution should contact the Registrar and obtain your certificate for you.
15Can Investors still obtain a certificate if so desired?
Yes. Although the dematerialization process is set up to provide greater security and easy access; Investors may approach the Registrars and request for a physical certificate.
16What are securities?
Securities are negotiable financial instrument that holds some type of monetary value and are frequently traded in the financial markets. These include Equity, Bonds, Notes, Options, Collective Investment Schemes, Mutual Funds, Real Estate Investment Trusts (REITS). Securities can be broadly categorized into two distinct types: Equities and Debts.
17What is equity?
Equity is a stock or any other security representing an ownership interest in a company.
18What is a bond?
A Bond is an instrument of indebtedness of the bond issuer to the holders. It is a debt security, under which the issuer owes the holders a debt and depending on the terms of the bond agreement; the bond issuer is obliged to pay the holder interest (the coupon) and/or to repay the principal at a later date, termed the maturity.
19What are Collective Investment Scheme [“CIS”]?
Collective Investment Scheme is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group. This allows for sharing of risks and returns for the underlying investments of the scheme
20What are derivatives?
Derivatives are financial instruments that derives its value from the underlying entities such as asset, index or interest rate. It has no intrinsic value in itself.
21What are mutual funds?
A Mutual Fund is a type of professionally managed collective investment vehicle that pools money from many Investors to purchase securities. It could be "open-ended," meaning Investors can trade shares of the fund at any time or close ended.
22What are Real Estate Investment Trust Scheme (REITS)?
REITS is a vehicle that invests in the ownership and management of a pool of real estate assets and mortgages, and packages them as tradable securities into which individual investors can subscribe.
23How are "Linked Notes and other Derivatives traded on the NASD OTC Market?
The securities of Linked Notes will go through the same process of dematerialization and admission to trade on NASD OTC Market as regular equities. Any modifications to the process will be communicated to the client ahead of the trade.

Question Request

If you have a question that is not listed above, kindly fill the form below to send us your question.