By Seun Ibiyemi
The Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has announced that Nigeria’s transition to a T+2 settlement cycle in the capital market will significantly enhance efficiency, reduce systemic risk, and strengthen investor confidence.
Speaking in Abuja at a Trade Associations Roundtable themed “Ensuring Stakeholder Readiness for T+2 Settlement,” Dr. Agama explained that the migration from the current T+3 cycle represents a strategic imperative to align Nigeria’s capital market with global best practices.
The new T+2 framework, where trade transactions are completed two days after execution, is viewed by the SEC as a major milestone. “
A shorter settlement cycle is a hallmark of a mature, dynamic, and competitive market,” Agama stated. “It significantly reduces counterparty risk and market exposure, enhances liquidity by returning capital to investors more quickly, and positions Nigeria as a key player in the global financial arena.”
He emphasized that cutting the time between execution and settlement minimizes the risk of default, improves liquidity, and allows investors to reinvest funds more rapidly, thereby driving greater overall market activity.
While acknowledging that many advanced economies are already moving toward a T+1 system, Agama affirmed that the transition to T+2 is a crucial step in keeping Nigeria’s financial markets globally relevant and future-ready.
The SEC boss stressed that the success of this critical reform hinges on the collective readiness of all market stakeholders including brokers, custodians, clearing houses, and investors. He called on trade associations to take the lead in preparing their members through operational adjustments, technology upgrades, and comprehensive awareness campaigns.
“Your readiness and that of your members is the single most important determinant of our success,” he asserted. “This means recalibrating back-office operations, streamlining settlement processes, and ensuring that all market participants are informed and prepared.”
Agama assured stakeholders that the Commission is collaborating closely with the Nigerian Exchange Limited (NGX), the Central Securities Clearing System (CSCS), and other financial market infrastructures to ensure a smooth and coordinated transition. Furthermore, the SEC will intensify investor education to help market participants fully understand the implications and benefits of the T+2 system.
“The move to T+2 is a necessary leap forward for the Nigerian capital market,” he concluded. “It reflects our collective ambition to build a market that is efficient, resilient, and globally competitive.”