The Securities and Exchange Commission (SEC) has announced its plan to move Nigeria’s capital market settlement cycle from T+3 to T+2, a reform aimed at improving market efficiency, reducing risks, and boosting investor confidence. The Director-General of the Commission, Emomotimi Agama, disclosed this during a Trade Associations Roundtable themed “Ensuring Stakeholder Readiness for T+2 Settlement” held in Abuja on Wednesday.
Agama described the initiative as a significant step toward aligning Nigeria’s capital market with global standards. He explained that the move would make the market more competitive, dynamic, and resilient. According to him, a shorter settlement cycle is one of the defining traits of a well-developed and efficient financial market.
“A shorter settlement cycle demonstrates the maturity and competitiveness of a market. It helps minimize counterparty risk and market exposure by shortening the time between trade execution and final settlement. The faster transactions are settled, the lower the likelihood of defaults that could affect the financial system,” Agama said.
He noted that the new T+2 system would enhance liquidity by allowing investors to access their funds more quickly, enabling reinvestment and encouraging greater market participation. The reform, he added, would strengthen Nigeria’s position in the global financial landscape, attract more foreign investors, and promote long-term market stability. “Ultimately, an efficient and secure settlement structure boosts investor trust and supports sustainable market growth,” he emphasized.
Agama further explained that the T+2 cycle would help reduce operational risks and improve transaction efficiency. By accelerating settlement timelines, it would improve cash flow management, limit exposure to price fluctuations, and encourage more active trading.
He also pointed out that several advanced economies have already adopted T+1 settlements, adding that Nigeria must continue evolving to remain competitive globally. “The global financial system is rapidly changing due to technological innovation and investors’ demand for greater efficiency. Transitioning to T+2 is, therefore, a strategic move to ensure that our market remains modern and future-ready,” he stated.
Agama emphasized that the successful implementation of the new system would depend on the collective preparedness of all stakeholders, including brokers, custodians, clearing houses, and investors. “Everyone’s readiness is vital. This includes upgrading back-office operations, improving technology systems, streamlining settlement procedures, and ensuring that all market participants are fully informed and equipped,” he said.
To ensure a seamless transition, he noted that the SEC would work closely with the Nigerian Exchange Limited (NGX), the Central Securities Clearing System (CSCS), trade associations, and other market operators. The Commission would also intensify investor education and awareness campaigns to help stakeholders understand the new system and its benefits.
Agama described the transition as a necessary and forward-looking reform that demonstrates Nigeria’s commitment to building a stronger, more efficient, and globally competitive market. He urged stakeholders to collaborate, share best practices, and identify potential challenges to ensure a smooth implementation process.
“The shift to T+2 is a major stride toward efficiency and global relevance, positioning Nigeria’s capital market for sustainable growth and increased investor confidence,” he concluded.
