Nigeria’s Shift to T+2 Settlement Will Boost Market Efficiency – SEC DG

By Oluwakemi Kindness

Nigeria’s capital market is set for a major reform as the Securities and Exchange Commission (SEC) prepares to transition to a T+2 settlement cycle, a move the Commission says will enhance efficiency, reduce risks, and strengthen investor confidence.

Speaking at a Trade Associations Roundtable on “Ensuring Stakeholder Readiness for T+2 Settlement” held on Wednesday in Abuja, the Director-General of SEC, Dr. Emomotimi Agama, described the reform as a key step in aligning Nigeria’s market with global standards.

“A shorter settlement cycle is a hallmark of a mature, dynamic, and competitive market,” Dr. Agama said. “It significantly reduces counterparty risk, enhances liquidity, and boosts investor confidence.”

He explained that the T+2 settlement framework, which reduces the time between trade execution and final settlement from three days (T+3) to two will lower market exposure, minimize defaults, and accelerate capital turnover for investors, allowing them to reinvest more quickly.

Dr. Agama noted that many advanced markets have already adopted or are transitioning to T+1 settlement cycles, and Nigeria must continue evolving to remain globally competitive.

“The global financial landscape is changing rapidly, driven by technology and investor demand for efficiency. Transitioning to T+2 is a strategic imperative to keep our market future-ready,” he said.

The SEC chief emphasised that the success of the transition will depend on the readiness of brokers, custodians, clearing houses, and investors.

He urged trade associations to take proactive steps in preparing their members for operational and technological adjustments.

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

“This means recalibrating back-office systems, upgrading technology, and streamlining settlement processes.”

He assured that the SEC is working closely with the Nigerian Exchange Limited (NGX) and the Central Securities Clearing System (CSCS) to ensure a seamless migration.

The Commission also plans to intensify investor education and awareness campaigns to communicate the benefits and operational changes that come with the reform.

“The move to T+2 is a necessary leap forward for the Nigerian capital market. It’s a testament to our shared ambition to build a market that is efficient, resilient, and globally competitive,” he stated.

Dr. Agama urged stakeholders to collaborate in identifying potential bottlenecks and mapping out an implementation roadmap, reaffirming the SEC’s commitment to providing regulatory support, guidance, and coordination throughout the transition process.