SEC Implements T+1 Settlement, Positioning Nigerian Market For Global Capital

By Jennete Ugo Anya

The Securities and Exchange Commission (SEC), in collaboration with Nigerian Exchange Limited (NGX), Central Securities Clearing System (CSCS) and market operators, has completed Nigeria’s transition to a T+1 settlement cycle, making it the first capital market in Africa to adopt the framework. Effective immediately, securities transactions executed on the Nigerian Exchange Limited settle one business day after trade execution, replacing the T+2 cycle introduced in November 2025. The transition was formally unveiled in Lagos as part of broader capital market reforms under the Investments and Securities Act 2025.

DECISION HIGHLIGHT

Nigeria has accelerated post-trade settlement infrastructure to align with leading global markets, reduce transaction risk and improve capital market competitiveness.

DECISION MEMO

The move is fundamentally a market-efficiency reform. While settlement cycles are often viewed as technical back-office processes, they directly influence liquidity, capital mobility and investor confidence.

By reducing settlement time from two days to one, Nigeria shortens the period during which counterparties remain exposed to settlement risk. The reform also improves capital velocity, allowing investors to recycle funds more quickly and increasing market efficiency.

More importantly, the transition signals an ambition to compete for global capital flows. Director-General of SEC, Dr. Emomotimi Agama, explicitly linked the reform to international market standards, noting that markets representing about 60 percent of global market capitalisation have already adopted T+1.

The initiative also appears to be part of a broader modernisation pathway. Regulatory references to eventual T+0 settlement, alongside ambitions to expand into private markets, fixed income and digital assets, suggest that settlement reform is being used as a foundation for wider market development rather than as an isolated operational upgrade.

Agama said: “The financial world is embracing T+1 rapidly, and what was once considered advanced is quickly becoming the baseline expectation for any market serious about competing for international capital. Nigeria will not be left behind.”

Umaru Kwairanga, Chairman, NGX Group, said: “The move reinforces the Nigerian market as one of the most efficient markets globally.”

Temi Popoola, Chairman, Central Securities Clearing System and Group Chief Executive Officer, NGX Group, also said: “This is really not a destination at all. This is part of a longer journey.”

DATA BOX

• New settlement cycle: T+1
• Previous settlement cycle: T+2
• Earlier cycle: T+3
• T+2 implementation: November 2025
• Transition period from T+2 to T+1: Six months
• Global market capitalisation already operating under T+1:

• Approximately 60%

• Key markets already on T+1:

• United States
• Canada
• Mexico
• India

• Future SEC objective:

• T+0 settlement planning

• Regulatory framework:

• Investments and Securities Act 2025

WHO WINS / WHO LOSES

Winners: Retail investors, institutional investors, brokers, custodians and issuers benefiting from faster liquidity, lower settlement risk and improved capital efficiency.

Losers: Market participants operating with legacy systems that may face higher compliance and technology adaptation costs.

POLICY SIGNALS

• Strong regulatory commitment to capital market modernisation.
• Alignment with international post-trade standards.
• Greater emphasis on market infrastructure as a competitiveness tool.
• Regulatory preparation for broader asset-class expansion and digital market evolution.

INVESTOR SIGNAL

The transition strengthens Nigeria’s investment proposition by reducing operational friction and settlement risk. For foreign portfolio investors, faster settlement improves market accessibility, while domestic investors benefit from quicker capital recycling and enhanced liquidity. The reform also signals continued infrastructure-led market development.

RISK RADAR

• Technology and operational resilience requirements.
• Cybersecurity exposure as transaction speed increases.
• Need for continued market-wide system integration.
• Execution risks associated with eventual migration towards T+0 settlement.
• Potential mismatch between infrastructure advancement and market depth growth.