By Seun Ibiyemi
Nigeria’s capital market regulators have begun reviewing free-float requirements for companies listed on the Nigerian Exchange (NGX) in a bid to boost market liquidity, deepen equity trading, and attract more investors.
The NGX Group confirmed the development on Monday, noting that discussions are ongoing with the Securities and Exchange Commission (SEC) to reassess existing rules governing publicly tradable shares.
The review follows concerns that low levels of free-floating shares in some listed companies are limiting liquidity and increasing the risk of price volatility.
Currently, large companies on the NGX are required to make at least 20% of their shareholding or N40 billion worth of shares available for public trading.
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Companies on the Growth Board, primarily small and medium-sized enterprises (SMEs), must float at least 15% of their share capital.
Temi Popoola, CEO of NGX Group, said the review aims to ensure compliance and improve market efficiency. “We are assessing how to optimise existing free-float levels, ensure the accuracy of free-float data, and evaluate whether current requirements remain appropriate as the market evolves,” he said.
Popoola added that regulators are also exploring whether free-float should influence index structures, which are currently based mainly on market capitalization, and whether public shareholding rules should be revised to strengthen market depth.
“These efforts are part of our broader objective of deepening the market and supporting growing investor participation,” he said, noting that the changes could make equity and index weightings reflect shares outstanding, rather than market capitalization alone.
