T+2 cycle: Nigeria meets investor expectations for speed, reliability

Nigeria has officially commenced the T+2 settlement cycle in its capital market. This transition which became effective on Friday, November 28 represents a significant milestone in the ongoing modernisation of Nigeria’s post-trade infrastructure and reflects the market’s collective commitment to global best practices.

The shorter settlement window is expected to bolster market liquidity, reduce counterparty and operational risk, and strengthen Nigeria’s appeal to foreign portfolio investors (FPIs) at a time when policymakers are seeking deeper capital market support for economic expansion.

The transition T+2 settlement cycle also positions Nigeria more competitively within the global capital market landscape, where shorter settlement cycles are increasingly becoming the standard. It improves investor experience by ensuring quicker access to funds and securities, while to operators it allows more agile trading.

The Central Securities Clearing System Plc (CSCS), Nigeria’s premier capital market infrastructure worked closely with the Securities and Exchange Commission (SEC), and other Exchanges, market operators, custodians, and key trade associations to ensure smooth implementation.

During a press conference convened in Lagos by the Central Securities Clearing System (CSCS) to announce the commencement of T+2 settlement cycle, it was noted as one of the most substantial market-infrastructure reforms undertaken in nearly two decades.

T+2 settlement cycle is where the completion of a securities trade, including the transfer of ownership and payment, occurs two business days after the trade is executed. For instance, a trade executed on Monday (trade day) will be settled by Wednesday (trade day + 2 business days).

How it works …

Trade day (T): A trade is carried out (example, an investor buys shares on Monday). Settlement day (T+2): The transaction is completed – the seller receives cash, and the buyer receives securities on the second business day after the trade (in this case, Wednesday).

Since last Friday’s commencement of this new settlement cycle, sentiments amongst market participants indicate that the shift underscores a broader effort to build a more efficient and globally competitive financial system.

The T+2 cycle, they said, strengthens the foundation for deeper liquidity, expanded product offerings and improved resilience across the Nigerian capital market.

As the market adjusts to this new settlement environment, here are views of market stakeholders on this transition that brings Africa’s largest economy closer to post-trade norms in the US, Europe and major Asian markets.

Read also: Nigeria eyes 24hr-cycle next after slashing stock settlement time by a third

Emomotimi Agama, Director General, SEC…

Emomotimi Agama, Director General, Securities and Exchange Commission (SEC), said the transition reflects the regulator’s push to modernise the market infrastructure.

He pointed to the evolution from analogue share certificates to today’s digital processes as evidence of sustained progress. “The rest of the world is moving towards faster, more efficient, more secure transactions, and Nigeria is moving with them,” he said.

Agama added that the shift would tighten requirements for surveillance, reconciliation and technology infrastructure but insisted that the ecosystem had demonstrated “credible readiness” and that regulators “cannot afford to fail”.

Agama had noted ahead of last Friday’s go-live of the new settlement cycle that, “The move is not just a technical reform but a major milestone that will make the Nigerian market more competitive and resilient. A shorter settlement cycle is a hallmark of a mature, dynamic, and competitive market. It directly addresses several key objectives: it significantly reduces counterparty risk and market exposure.

“The less time between trade execution and final settlement, the lower the potential for a default to ripple through the system,” Agama said recently during the Trade Associations Roundtable on “Ensuring Stakeholder Readiness for T+2 Settlement”.

“It boosts market liquidity by returning capital to investors more quickly, allowing for its redeployment and fostering greater market activity. It aligns our market with international best practices, enhancing our attractiveness to foreign investment and reinforcing Nigeria’s position as a key player in the global financial arena. Ultimately, a more efficient and safer settlement system strengthens the bedrock of our market—investor confidence,” Agama added.

Temi Popoola, chairman, CSCS and Group Managing Director/CEO, NGX Group…

He said the migration represented more than a technical adjustment. “It is a deliberate step towards building a market anchored on efficiency, transparency and global competitiveness,” he said. “The move to T+2 is not merely operational; it is a strategic signal that Nigeria is prepared to meet investor expectations for speed, reliability and predictability.”

Popoola noted that the decision followed months of coordinated testing and stakeholder consultations and aligned with the government’s ambition to grow the economy to $1trillion. Shorter settlement cycles, he said, would underpin more sophisticated instruments and help improve overall market integrity.

Haruna Jalo-Waziri, chief executive, CSCS…

He credited the reform’s momentum to its inclusion in the SEC’s 10-Year Capital Market Master Plan. Jalo-Waziri highlighted the recent upgrade of CSCS’s IBM Power10 systems as critical in supporting the accelerated cycle. “We executed a major technology upgrade without a glitch. That is the strength of the system supporting this transition,” he said.

Jalo-Waziri also added that the move would provide investors with faster access to funds, reduce settlement risk and push the market closer to T+1, a standard adopted by several advanced markets, and eventually real-time settlement.

Ahead of the official go-live, Jalo-Waziri said, “The successful commencement of the T+2 settlement cycle is the product of extensive collaboration, rigorous testing, and the unwavering commitment of all market stakeholders. We are proud to lead this change at a time when efficiency and resilience are critical pillars for market competitiveness.”

“As we embrace the T+2 framework, we are unlocking efficiencies that will shape the future of Nigeria’s capital market for years to come. This milestone sends a clear message that the Nigerian market is evolving, forward-thinking, and determined to match and surpass global benchmarks in post-trade operations.”

Instruments, markets affected …

The reduction impacts all tradable instruments except for fixed income instruments and commodities which already settle on a T+2 cycle. The settlement cycle impacts secondary market transactions and it is implemented on the following exchanges: The Nigerian Exchange Limited (NGX), the NASD OTC Securities Exchange, and the Lagos Commodities & Futures Exchanges (LCFE).

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos.

Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA).

Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.

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