T+2 Settlement Cycle to Boost Confidence, Global Competitiveness, Says SEC
By Patience Ikpeme
Nigeria’s planned shift to a T+2 settlement cycle in the capital market will significantly enhance market efficiency, reduce risks, and strengthen investor confidence, according to the Securities and Exchange Commission (SEC).
The Director-General of the SEC, Dr. Emomotimi Agama, stated that the migration from the current T+3 cycle (trade date plus three days) to a T+2 cycle (trade date plus two days) represents a strategic move to align Nigeria’s capital market with global best practices. Dr. Agama made the comments while speaking at a Trade Associations Roundtable on “Ensuring Stakeholder Readiness for T+2 Settlement” held in Abuja on Wednesday.
Dr. Agama explained that the adoption of the T+2 system is not merely a technical reform but a major milestone that will make the Nigerian market more competitive and resilient.
He said: “A shorter settlement cycle is a hallmark of a mature, dynamic, and competitive market. It directly addresses several key objectives: It significantly reduces counterparty risk and market exposure. The less time between trade execution and final settlement, the lower the potential for a default to ripple through the system.”
He added that faster settlement would boost market liquidity by returning capital to investors more quickly, allowing for its redeployment and fostering greater market activity.
“It aligns our market with international best practices, enhancing our attractiveness to foreign investment and reinforcing Nigeria’s position as a key player in the global financial arena. Ultimately, a more efficient and safer settlement system strengthens the bedrock of our market—investor confidence,” Dr. Agama stated.
The SEC boss noted that many advanced markets are already moving toward even faster T+1 settlements, and Nigeria must continue to evolve to remain globally relevant.
“The global financial landscape is constantly changing, driven by technology and investor demand for efficiency. The transition to T+2 is, therefore, a strategic imperative to keep our market competitive and future-ready,” he affirmed.
Dr. Agama stressed that the success of the transition depends on the collective readiness of all market participants—from brokers and custodians to clearing houses and investors. He urged trade associations to take a leading role in preparing their members for the operational and technological changes the new system will require.
“Your readiness and that of your members is the single most important determinant of our success. This means recalibrating back-office operations, upgrading technology systems, streamlining settlement processes, and ensuring that all market participants are informed and prepared,” he advised.
He gave an assurance that the Commission would work closely with trade associations, market operators, and Financial Market Infrastructures, such as the Nigerian Exchange Limited and the Central Securities Clearing System, to ensure a smooth and coordinated transition. He added that the SEC would also intensify investor education and awareness campaigns.
He stated: “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.”
Dr. Agama concluded by calling on stakeholders to engage constructively and collaboratively to identify potential bottlenecks, share best practices, and agree on a clear roadmap for implementation, expressing the SEC’s commitment to providing the necessary regulatory support.
