SEC introduces T+2 settlement cycle

The Securities and Exchange Commission (SEC) has revealed that Nigeria’s capital market will transition from the current T+3 to a T+2 settlement cycle.

According to the Director-General of SEC, Dr Emomotimi Agama, the migration is a strategic milestone that aligns Nigeria’s capital market with international best practices and global market standards.

At a Trade Associations Round-table themed “Ensuring Stakeholder Readiness for T+2 Settlement” held in Abuja on Wednesday, Agama explained that the shortened settlement period would lead to faster completion of transactions, reduce counter-party and default risks, and improve market liquidity by enabling quicker reinvestment of funds.

Agama stated thus:

“A shorter settlement cycle is a hallmark of a mature, dynamic, and competitive market. It significantly reduces counter-party risk and market exposure. The less time between trade execution and final settlement, the lower the potential for defaults to ripple through the system.”

“The T+2 system will return capital to investors more quickly, allowing for its redeployment and fostering greater market activity.

The move is not merely a technical reform but a strategic evolution that reflects Nigeria’s commitment to modernizing its capital market infrastructure.

“The global financial landscape is constantly changing, driven by technology and investor demand for efficiency.”

“The transition to T+2 is a strategic imperative to keep our market competitive and future-ready.”

“Your readiness and that of your members is the single most important determinant of our success.

“This means re-calibrating back-office operations, upgrading technology systems, streamlining settlement processes, and ensuring all market participants are informed and prepared”

“The move to T+2 is a necessary leap forward for the Nigerian capital market. It is a testament to our collective ambition to build a market that is efficient, resilient, and globally competitive”