Yemisi Izuora
The Securities and Exchange Commission (SEC) has confirmed that the adoption of the T+1 settlement cycle in Nigeria’s capital market is going on smoothly, describing it as a development that has enhanced competitiveness and provided relief to market participants.
The Director-General of the SEC, Dr. Emomotimi Agama, stated this in an interview with journalists in Abuja at the weekend.
Agama, who was represented by the Director, Registration, Exchanges and Market Infrastructure, Mrs. Hafsat Rufai, said both local and international investors had expressed satisfaction with the new settlement cycle.
She said: “Feedback from them has been excellent. They are happy with T+1, and the local investors are also happy with T+1. The fear initially was around the availability of cash to settle, time zone being one of the major considerations.
“Sometimes, in some countries, when we are closing our market at 4:00 p.m., it is still early in the day. Sometimes, it’s even longer than being early in the day; it’s midnight in some countries. And so everybody is concerned about how to source cash or how to source funds for settlement.
“But knowing that it is not at 8:00 a.m., it is 5:00 p.m., I think that gives enough time for the custodian banks, who are representatives of those investors, to source the funds required and settle the securities and cash as well, because it’s a DVP market. It’s delivery versus payment.”
Agama said no default had so far been recorded due to the unavailability of funds for settlement at the new deadline.
“It’s just a matter of letting everybody understand that the settlement time is not 8:00 a.m.; it is 5:00 p.m. And by 5:00 p.m., everybody is good. So far, it has been good. Feedback has also been very excellent,” he added.
According to him, the Nigerian capital market operated on a T+3 settlement cycle for several years before the market began a phased transition aimed at modernising the market, improving competitiveness and attractiveness, increasing liquidity and reducing settlement risks.
He said the market moved from T+3 to T+2 on November 28, 2025, before migrating to T+1 on June 1, 2026.
“Transaction day or the trade day when your shares are bought or sold on a particular day, that is day T, and then plus one, which is the current settlement cycle, means that when you buy your shares, say for instance you buy today, being a Monday, the shares will settle in your account by 5:00 p.m. tomorrow,” he explained.
Agama said the reduction in the settlement cycle was aimed at making the Nigerian market more efficient by allowing investors to receive their securities or cash sooner.
“The emphasis on 5:00 p.m. is that over the years, when you were on T+3 or T+2, settlement time was 8:00 a.m. Meaning that if you buy your shares today on T+2, that is the trade date, and then two days after, which would have been Wednesday when you were on T+2, you would get your shares if you bought or you get your cash if you sold at 8:00 a.m.
“Now we decided that we need to do better for the Nigerian market by shortening that cycle. So why buy today and wait for another 48 hours or thereabout, or two days, before you get your security? So, we shortened that transaction cycle, or settlement cycle, I beg pardon, to T+1, meaning that the trade day and a day after, that’s the first step.”
The SEC DG further disclosed that the market also shifted the settlement deadline from 8:00 a.m. to 5:00 p.m. following the extension of trading hours.
He said trading hours on the Nigerian Exchange (NGX) had earlier been extended from 2:30 p.m. to 4:00 p.m.
“If you recall, we extended trading hours earlier this year from 2:30 to 4:00 p.m.at the NGX, and then we thought, if market closes at 4:00 and we ask people to settle, that is, to provide cash and securities, at 8:00 a.m. the next day, that kind of close to being T+0 is almost as good as just telling me to pay today, and we don’t want that strain,” he said.