SEC Approves 2-Day Settlement Cycle for Capital Market Transactions

The Securities and Exchange Commission (SEC) has approved a new cycle to be allowed for settlement of capital market transactions in two days (T+2).

Chief Executive Officer (CEO) of the Central Securities Clearing System (CSCS), Haruna Jalo-Waziri, said on Wednesday, September 3.

He noted that following the SEC approval, the Nigerian capital market will migrate to a T+2 settlement cycle from November 28.

The new settlement cycle, which replaces the current T+3 system, is expected to enhance liquidity, cut counterparty risk, and strengthen investor confidence.

“The transition to T+2 is a major milestone for the Nigerian capital market and reflects the collaborative spirit of our ecosystem.

“This shift aligns our market with global best practice while strengthening efficiency, resilience, and investor trust. CSCS is proud to coordinate this journey with the support of regulators, exchanges, and stakeholders,” Jalo-Waziri said.

Pinnacle Daily reports that T+2 settlement is a financial market process where the exchange of ownership of a security (like a stock) for money is completed two business days after the trade date.

According to Jalo-Waziri, the move is a major milestone aligning the local market with global standards.

He hinted that the settlement cycle review committee (SCRC), coordinated by CSCS, carried out a multi-phase assessment and submitted its framework to the SEC for review and approval.

A webinar, themed ‘Advancing Market Efficiency Through T+2 Settlement’, is to be held on September 10, with the SEC director-general, Emomotimi Agama, and heads of Nigeria’s securities exchanges to be present.

Jalo-Waziri added that stakeholders are invited to register via the link.

Pinnacle Daily reports that the CSCS started the settlement cycle with a five-day (T+5) period and brought it to three days before reducing it to two days.