SEC Moves to T+2 Settlement Cycle to Boost Efficiency and Investor Confidence in Nigeria’s Capital Market

The Securities and Exchange Commission (SEC) has unveiled plans to transition Nigeria’s capital market from a T+3 to a T+2 settlement cycle, aiming to enhance market efficiency, reduce risks, and strengthen investor confidence.

SEC Director-General, Emomotimi Agama, made the announcement during a Trade Associations Roundtable on ‘Ensuring Stakeholder Readiness for T+2 Settlement’ held in Abuja on Wednesday.

Agama described the transition as a significant step in aligning Nigeria’s capital market with global best practices, making it more competitive and resilient.

“A shorter settlement cycle is a hallmark of a mature and dynamic market. It reduces counterparty risk and market exposure. The shorter the time between trade execution and settlement, the lower the risk of defaults impacting the system,” he explained.

He further noted that the T+2 system would improve market liquidity by returning capital to investors more quickly, allowing for reinvestment and increased trading activity.

“It aligns our market with international standards, attracts foreign investors, and reinforces Nigeria’s position in the global financial arena. Ultimately, a faster and safer settlement system strengthens investor confidence,” Agama said.

Highlighting global trends, he pointed out that several advanced economies have already moved toward T+1 settlements, emphasizing that Nigeria must continue evolving to remain globally relevant.

Agama stressed that the success of the transition depends on the readiness of all market participants, including brokers, custodians, clearing houses, and investors. “This requires upgrading technology systems, streamlining settlement processes, and ensuring that all stakeholders are informed and prepared,” he added.

He assured stakeholders that the SEC would collaborate closely with trade associations, market operators, and financial market infrastructures like the Nigerian Exchange Limited and the Central Securities Clearing System to ensure a smooth transition.

Additionally, the Commission will intensify investor education and awareness campaigns to highlight the benefits and implications of the T+2 system.

“The move to T+2 represents a major leap forward for the Nigerian capital market. It demonstrates our collective ambition to build an efficient, resilient, and globally competitive market,” Agama concluded, urging stakeholders to work together to identify challenges, share best practices, and implement a clear roadmap.