NSE Single Share Trading Rule: What It Means for Investors

What Changed: From 100-Share Minimum to Single-Unit Trading

The old regime: Normal Board vs Odd Lots Board

Historically, NSE operated a bifurcated system:

Normal Board: trades in multiples of at least 100 shares
Odd Lots Board: for trades of less than 100 shares, subject to stricter limitations

Under that regime, shares below 100 units had to go through the odd lots board, which came with constraints: no participation in the pre-open period, only limit orders (i.e. price must be specified), and illiquidity (few counterparties willing to transact). In many cases, odd lots trades would attract discounts because buyers had fewer incentives to transact at “fair” value when liquidity is poor.

That 100-share minimum was a barrier to entry—especially for retail investors who wished to start small or diversify across many stocks. For example, a stock trading at KSh 20 per share meant the minimum investment was KSh 2,000, which may have been too much for many first-time investors.

The new regime: single share trading

Under the revised NSE Equity Trading Rules (Amended July 2025), the minimum board lot on the Normal Board, Restricted Normal Board, and Recovery Board is one share. The odd lots board has been eliminated; all orders will now be routed through the Main Order Book.

Other important features:

The official daily closing price will only be determined if at least 100 shares or units are traded in the session. If total volume is less than 100, the closing price reverts to the average from the previous day.
The recovery board, introduced for issuers in financial distress or noncompliance, also adopts a one-share minimum.
The rulebook also adjusts listing provisions and price discovery rules for newly listed securities—e.g. no price spreads during the open auction call for a new listing, and daily allowable movements may not apply on first trading day.

In short: the NSE has shifted to a single-unit trading regime, doing away with the old 100-share minimum and the separate odd lots board.

Why This Reform? Rationale & Objectives

The NSE cites several motivations for this sweeping change. Some key rationales include:

Improve market inclusivity and retail participation

By lowering the entry barrier, more Kenyans—especially those with limited capital—can participate in equity investing. Many retail investors were effectively locked out by the 100-share rule. When you can buy just one share, even high-priced counters become reachable.

Boost liquidity, broaden participation across counters

Stocks that were thinly traded or considered “high nominal price” may get more activity under the new regime. With more participants able to transact, liquidity could improve in previously neglected counters. Greater liquidity tends to reduce bid-ask spreads and improve price efficiency.

Align with global standards and modern equity markets

Many mature exchanges permit odd-lot trading or single-share orders (or fractional shares). Bringing the NSE into this paradigm is a modernization step.

Enhance price discovery and market dynamism

With more flexibility in order sizes, the price formation process could become more nuanced. In addition, new listings will have more freedom in establishing prices under the revised rules.

Moreover, the elimination of the odd lots board simplifies infrastructure and reduces market fragmentation (i.e. multiple trading boards). All trading now flows through the main order book.

Signaling & strategic goals

This reform is part of the NSE’s strategic plan for 2025–2029, which emphasizes revitalizing the market via deeper retail investor participation. Such moves can also send a signal to local and foreign investors that Kenya’s capital markets are evolving and becoming more accessible.

Key Provisions & Technicalities in the New Rulebook

To understand how these changes play out in practice, let’s dive into the revised NSE Equity Trading Rules (July 2025).

Board lots

The minimum board lot on the Normal Board shall be one security (i.e. one share).
The minimum on the Restricted Normal Board shall also be one.
The minimum on the Recovery Board shall be one.

Thus, the concept of trading in multiples of 100 shares is replaced uniformly with multiples of one.

Removal of separate odd lots board & integration into main board

Under the old structure, odd lots traded in a separate board with restrictions. Now, all trades—including small ones—go through the main order book.

Reference / closing price determination

The official daily closing price of a security is recognized only if the cumulative traded volume in that session is at least 100 units. If trading volume is under 100, the previous day’s average closing price is used instead.

This is a protective mechanism to prevent artificially low-volume trades from setting a misleading closing price.

New listing price rules

For newly listed equity securities:

There shall be no price spreads during the open auction call.
The daily allowable price movement limits (i.e. “daily circuit breakers” or price ceilings/floors) shall not apply on the first day of trading.

These adjustments help ensure that new securities can find their equilibrium price without price caps or forced spreads interfering.

Other trading rules

The revised rulebook retains several order qualifiers (Immediate or Cancel, Good Till Cancelled, etc.), limits on bids/offers, market maker orders, cancellation rules, trading status of securities, etc. These rules govern how orders are handled in the ATS (Automated Trading System), how cancellations/amendments work, how matching is done, etc.

Transitional provisions & compliance

The rulebook includes transitional provisions to ease the transition from the old regime to the new one.

One should note: just because the rule allows single-unit trading doesn’t mean every counter will immediately see meaningful single-share activity. Market behavior, liquidity, and participant habits will evolve over time.

How Investors Are Likely to Be Affected

The shift to single-unit trading is not merely procedural—it could reshape how investors, especially retail ones, engage with the NSE.

Greater access & lower financial barrier

Perhaps the most immediate beneficiary is the everyday investor with limited capital. High nominal price counters, once off-limits due to 100-share minimums, are now within reach. You can buy, say, 1, 5, 10, or 50 shares as you choose. This democratizes access.

More diversification for small portfolios

Smaller capital investors can more easily spread their bets. Rather than being constrained to one or two stocks because of minimum trade sizes, investors can create more balanced micro-portfolios. This enables better risk management.

Liquidity effects: both upside and constraints

Upside: More participants entering the market may increase turnover, narrow bid-ask spreads, and foster trading in smaller counters that were previously dormant.
Constraint: If single-share trades dominate a counter with low overall demand, volume may still remain thin. And because closing price is only valid if 100 shares trade, in ultra-thin counters bottom-of-the-barrel trades may not influence the official price.

Price discovery and volatility

Smaller trades may lead to more “mini shocks” in price movements, especially in counters with shallow order books. Prices may become more volatile intra-day, especially in low-volume stocks, as small orders shift supply/demand balance.

Costs, spreads, and execution

Transaction costs (brokerage, fees, spreads) may become more meaningful relative to trade size. A small investor buying just one share must be careful that the cost of execution doesn’t eat up returns. Brokers may need to revisit minimum fee structures to accommodate micro trades.

Also, with more small orders, order matching systems may become more complex. The market depth display, execution priority, and order queuing will matter more.

Behavioral effects: more experimentation, but more noise

Lower entry costs may lead more people to experiment. Some may treat stock investing like trading in small increments, increasing speculation. This may introduce more noise into price movements. Not every small investor is long-term; many might chase momentum. That could raise volatility and short-term swings in certain stocks.

Implications for listed companies

Stronger retail base: Companies may benefit if retail ownership becomes more widespread and engaged. A broader shareholder base can strengthen corporate governance pressure, brand awareness, and engagement.
Volatility in share price: More small trades may lead to short-term wild swings, especially in thinly traded counters. Management and investor relations teams should be more proactive in communications.
Investor perception: Some companies may find increased liquidity and more visibility draws more attention.

Effects on brokers, fintechs, and intermediaries

Brokerages will need to adapt systems to process and aggregate many more small orders. Digital trading platforms, fractional share systems, and micro-investing products may become more viable. Fintechs and robo-advisors could build features around micro investing in equities tied to NSE.

Broker business models will also need to adjust—for instance, if their per-trade commission minimums are too high relative to micro trades, they may be uncompetitive.

Risks, Caveats & What to Watch Out For

While the reform is promising, there are pitfalls and caveats that investors must mind.

Execution risk and slippage

In thin counters, the bid-ask spread may be wide, and placing a small order might move the price more than anticipated. Execution risk is real: your small order might get filled at a suboptimal price if you choose market order in a low-liquidity stock.

Price signal distortion in low-volume counters

Because the closing price is only valid if 100 units transact, micro trades in low-volume counters may not influence price. In extreme cases, small trades may have no effect on the official price, which could create confusion.

In addition, micro trades in low liquidity counters may produce misleading intra-day pricing movements that don’t reflect broader demand.

Cost-to-return ratio for small trades

If transaction costs (brokerage, exchange fees, taxes) are not aligned with micro trades, small investors may find after-cost returns minimal or negative. There’s a risk that the cost burden outweighs gains for very small trades, especially in low-growth counters.

Overtrading / speculative behavior

Lowering barriers may encourage overtrading, short-term speculation, or volatility seeking, particularly among new or less experienced investors. Without adequate investor education and discipline, many may be prone to losses.

Technology & infrastructure strain

The surge in small orders might stress the ATS system, order matching engines, and brokers’ backends. Downtime, delays, or execution glitches are possible, especially in the early weeks of the transition.

Uneven uptake across counters

High-nominal price or thinly traded counters may remain less active despite the rule change. It may take time for investor habit to shift. Some stocks may still see most trades concentrated in “popular” counters even after reform.

Regulatory & monitoring risk

The CMA and NSE must be vigilant for manipulative practices — e.g. small, repeated trades to influence perception or prices. Monitoring, surveillance, and enforcement mechanisms are key.

Practical Tips for Investors in the Single-Unit Era

Here are some suggestions to make the most of the new regime while managing risk:

Start small, but keep cost efficiency in mind

While you can trade one share, evaluate whether it makes sense after transaction costs. Group small orders where possible (e.g. buy 10 shares instead of 1) to amortize brokerage cost per share.

Use limit orders in thin counters

In stocks with low liquidity, avoid market orders that could fill at unfavorable prices. Use limit orders to control execution price. Be patient—but watch out for non-execution if your price is too ambitious.

Monitor volume thresholds

Be aware that your trade may not influence the reference closing price unless cumulative traded volume is at least 100 units. Know that your small trade may have limited effect on the official price.

Focus on quality and fundamentals, not just novelty

Just because you can now trade a single share doesn’t make every counter attractive. Continue to evaluate companies by fundamentals, future prospects, governance, etc. Don’t let micro access lead to frivolous speculation.

Diversify wisely

Take advantage of lower entry sizes to spread your risks—but avoid overextending. A micro-portfolio across many stocks is beneficial, but keep transaction costs, monitoring burden, and education in mind.

Use technology and aggregator platforms

If your broker or fintech supports fractional or micro-investing tools (e.g. lump-sum contributions, automated periodic buying), leverage those to smooth your execution. Aggregator platforms can pool micro orders for better execution.

Watch trading hours and session dynamics

Small trades in the pre-open, open auction, or closing phase may behave differently. Be strategic with timing, especially for less liquid counters.

Track new listings and ETF behavior under new rules

Keep an eye on how newly listed stocks behave under the no-spread, no circuit breaker first day regime. Also monitor ETF trading, which may face specific rule exemptions.

Stay updated on regulatory guidance, broker policies

Watch for how brokers adjust their commission structures or minimum fees. Also monitor NSE and CMA for any further tweaks or clarifications to the rulebook.

Conclusion & Outlook

The removal of the 100-share minimum and shift to single-unit trading marks a bold step by the NSE to deepen market participation and modernize the equity trading environment in Kenya. While the reforms open new doors—especially for retail investors—they also necessitate prudence, patience, and an understanding of attendant risks.

In the near term, success will depend on how quickly investor behavior adapts, how technology and liquidity evolve, and how effectively market surveillance and governance safeguards are enforced. Over time, if volume, participation, and depth improve, this reform may well stand out as a landmark in Kenya’s capital markets history.

Frequently Asked Questions (FAQs) About NSE’s Single Share Trading Rule

What is the NSE single share trading rule?

The Nairobi Securities Exchange (NSE) single share trading rule is a reform introduced in August 2025 that allows investors to buy and sell shares in units of just one share, instead of the previous minimum requirement of 100 shares. This means that investors can now participate in the market with much smaller amounts of money, opening doors to wider retail participation and making investing more accessible.

Why did the NSE scrap the 100-share minimum?

The NSE removed the 100-share minimum to increase inclusivity and accessibility in the stock market. The earlier rule made it difficult for small investors to get started, especially with higher-priced stocks where buying 100 shares required a large capital outlay. By adopting single-unit trading, the NSE aims to boost retail participation, improve liquidity, and align with global stock exchange standards.

How does this change benefit small investors?

Small investors now have the freedom to start investing with very little money. For example, if a stock trades at KSh 20, they can now buy just one share for KSh 20 instead of being forced to spend KSh 2,000 for 100 shares. This makes it easier to start investing, build confidence, and diversify across multiple companies even with limited funds.

Will this make the NSE more liquid?

In theory, yes. The change should lead to more participation from retail investors, which increases the number of trades and boosts liquidity. However, the impact will depend on how many new investors take advantage of the change. Some counters that were previously inactive may see a rise in activity, but thinly traded stocks may still remain less liquid despite the reform.

How will the closing price of a stock be determined now?

To avoid price distortions from very small trades, the NSE has set a rule that the official daily closing price will only be recognized if at least 100 shares are traded during the day. If fewer than 100 shares change hands, the previous day’s closing price will be carried forward. This ensures that closing prices reflect meaningful trading activity.

Are there risks for investors under this new system?

Yes, there are risks. Transaction costs could be high relative to very small trades, meaning profits may be eaten up by brokerage fees. There’s also the risk of volatility in low-volume counters, as a small number of trades could move the price significantly. In addition, new investors may be tempted to overtrade or speculate excessively, which could lead to losses.

How will brokers adapt to the change?

Brokers will likely adjust their commission models and trading systems to handle more small-volume transactions. Some may introduce new digital platforms or products to attract small investors. However, investors should check the minimum brokerage fees charged by their brokers, as high costs could make very small trades uneconomical.

What does this mean for listed companies?

For listed companies, the reform could mean a larger base of retail shareholders, improved visibility, and potentially more liquidity in their shares. However, it could also bring increased volatility, especially for companies that already had thin trading volumes. Companies will need to improve investor relations to engage a broader and more diverse investor base.

Is this the same as fractional share trading?

No. Fractional share trading allows investors to buy part of a single share, such as half or a quarter of a share. The NSE’s reform allows trading in whole shares, but reduces the minimum from 100 shares to just one share. So while you can buy one share now, you still can’t buy 0.5 of a share.

What should new investors do before buying their first share?

New investors should first open a CDS account through an authorized broker, understand the fees involved, and research the companies they want to invest in. It’s also important to diversify even with small amounts and avoid buying based on speculation or hype. Education and patience remain critical for long-term success.