SEC Adopts T+2 Settlement To Boost Market Confidence

The Securities and Exchange Commission (SEC) has announced that Nigeria’s capital market will transition from the current T+3 to a T+2 settlement cycle, a major step designed to enhance efficiency, reduce systemic risks, and strengthen investor confidence.

Speaking at a Trade Associations Roundtable themed “Ensuring Stakeholder Readiness for T+2 Settlement” held in Abuja on Wednesday, the Director-General of the SEC, Dr Emomotimi Agama, described the migration as a strategic milestone that aligns Nigeria’s capital market with international best practices and global market standards.

Agama explained that the shortened settlement period would lead to faster completion of transactions, reduce counterparty and default risks, and improve market liquidity by enabling quicker reinvestment of funds.

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

The SEC chief added that the T+2 system will return capital to investors more quickly, allowing for its redeployment and fostering greater market activity.

He emphasised that this transition will make Nigeria’s capital market more attractive to both domestic and foreign investors while reinforcing its competitiveness in the global financial landscape.

According to Agama, the move is not merely a technical reform but a strategic evolution that reflects Nigeria’s commitment to modernising its capital market infrastructure.

He noted that many advanced economies are already moving toward T+1 settlement cycles, underscoring the need for Nigeria to remain adaptive and forward-looking.

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

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

Agama stressed that the success of the T+2 migration will depend heavily on the readiness of all market participants, including brokers, custodians, clearing houses, and investors.

He urged trade associations to take leadership roles in preparing their members for the operational and technological adjustments required for the new system.

“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 all market participants are informed and prepared”, Agama said.

To ensure a seamless transition, the SEC boss assured stakeholders that the Commission would continue to collaborate closely with Financial Market Infrastructures such as the Nigerian Exchange Limited (NGX) and the Central Securities Clearing System (CSCS), as well as market operators and trade associations.

He disclosed that the SEC will also intensify investor education and awareness campaigns to help market participants understand the implications, benefits, and operational adjustments required for the T+2 framework.

“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”, Agama said.

Agama called on stakeholders to engage collaboratively in identifying potential implementation challenges, sharing best practices, and developing a clear roadmap to ensure a smooth migration process.

He reaffirmed the Commission’s commitment to providing regulatory guidance and support throughout the transition period, describing the reform as a “proud milestone” that would solidify Nigeria’s standing among modern, investor-friendly capital markets worldwide.