Nigeria is moving towards a T+1 (trade date plus one day) settlement cycle and will eventually settle for a T+0 cycle, according to the Securities and Exchange Commission (SEC).
The move is part of a series of wide-ranging reforms the SEC Director-General Emomotimi Agama hinted at during the second Capital Market Committee (CMC) meeting for 2025 in Lagos.
According to him, the aim is to strengthen market efficiency, deepen investor confidence, and accelerate the digital transformation of Nigeria’s capital market.
Pinnacle Daily reports that Nigeria transitioned from T+3 to T+2 settlement for equities on November 28.
“This marked a major milestone for the Nigerian capital market and aligned it more closely with global best practice,” Agama said.
He believes that a shorter settlement cycle will enhance liquidity, reduce counterparty risk, and accelerate capital reinvestment.
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“The reform now applies across the Nigerian Exchange, NASD OTC Securities Exchange, and Lagos Commodities and Futures Exchange,” Agama stated.
Upticks in market activities
He noted that there were strong capital-raising activities between April and October, with significant transactions approved across debt, equity, and commercial paper markets.
“Notable programmes include the N500bn Climate Funding SPV and the N200bn Elektron Finance bond, reflecting growing investor interest in infrastructure and sustainable finance.
“The commercial paper market remained active, with over N753bn issued across sectors such as manufacturing, energy, and agriculture,” Agama said.
Issues unsettling the market
According to the SEC-DG, despite these positive reports, the market faced headwinds in November when it steeped considerably.
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Market capitalisation fell by N6.54 trillion, while the All-Share Index dropped nearly 7 per cent.
“The downturn was driven by profit-taking ahead of the planned 30 per cent Capital Gains Tax, weakened sentiment in banking stocks, and broader policy and global uncertainties,” Agama said.
Other reforms move
He noted that the Commission recently engaged a Bank of Ghana delegation on regulatory frameworks for non-interest capital markets, highlighting Nigeria’s N1.4 trillion sovereign Sukuk issuances and the growth of Islamic mutual funds.
Also, planning is underway for a Municipal Bond and Sukuk Summit scheduled for the first quarter of 2026.
“The SEC is collaborating with the Standards Organisation of Nigeria to update commodity standards, working with insurance brokers to enhance risk mitigation, and partnering with the Ministry of Solid Minerals to unlock funding for mining companies.
“It is also engaging the Central Bank of Nigeria to secure liquidity status for warehouse receipts while strengthening oversight of commodity exchanges through inspections and financial reviews,” Agama said.
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In the derivatives market, the SEC is collaborating with stakeholders to deploy a real-time surveillance system to reinforce market integrity.
He noted that updated rules on central counterparties, derivatives trading, online forex, and NG Clearing operations have been submitted to the Rules Committee.
He said a draft systemic risk management rule is also being developed to require stronger risk governance frameworks across regulated entities.
Agama continued that a commercial paper issuance module has been launched, with automation of quarterly and annual returns underway.
“The SEC is upgrading IT infrastructure and strengthening cybersecurity to support these reforms,” Agama said.
He announced that the SEC will implement a Harmonised Corporate Governance Reporting Template for public companies to streamline disclosures, eliminate duplication, and reduce compliance burdens.
He said the template will unify reporting across SEC regulations, the Nigerian Code of Corporate Governance 2018, and the Business Facilitation Act 2022.
He added that the renewal of registration for capital market operators will take place from January 1 to 31, 2026, while electronic receipt and processing of registration applications will commence in the first quarter of 2026.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
