Market News
Nigeria targets higher global inflows with shorter settlement cycle - THE NATION
by Taofik Salako, Deputy Business Editor
The Nigerian capital market will today transit from a four-day settlement cycle to a three-day cycle in a major change aimed at enhancing liquidity and investment activities by foreign and domestic investors.
The transition from previous T+3 cycle to T+2 settlement cycle enhances the global competitiveness of the Nigerian market, providing investors with greater turnaround time while reducing counter-party risks.
With the transition, all trades executed from today will now settle two business days after the trade date, as against the previous cycle when trades were settled or completed three days after the trade date.
Turnover at the Nigerian stock market had doubled to all-time record of N9.57 trillion in the first 10 months of this year, with foreign portfolio investors accounting for more than one-fifth of transactions at the market.
Managing Director, Central Securities Clearing System (CSCS) Plc, Haruna Jalo-Waziri, said the transition, which becomes effective today, 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.
According to him, the achievement strengthens operational efficiency, enhances market liquidity, and significantly reduces counter-party risk, ultimately improving investor experience and ensuring quicker access to funds and securities.
“The transition also positions Nigeria more competitively within the global capital market landscape, where shorter settlement cycles are increasingly becoming the standard,” Jalo-Waziri said.
He expressed confidence in the readiness of the market, noting that 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.
He said: “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”.
He pointed out that the CSCS had worked closely with the Securities and Exchange Commission (SEC), exchanges, market operators, custodians, and key trade associations to ensure smooth implementation.
According to him, comprehensive readiness assessments, industry-wide testing, and participant engagements were conducted to guarantee that systems, processes, and operational frameworks were aligned with the new cycle ahead of today’s launch.
He assured that as the market adjusts to this new settlement environment, CSCS remains committed to providing continuous support and guidance.
He added that the company has also made implementation procedures and guidelines available to all market participants to aid operational clarity and ensure seamless adoption.
“The T+2 transition marks another bold step in CSCS’s long-standing mission to drive innovation and operational excellence across Nigeria’s capital market. The organisation will continue to champion initiatives that strengthen market confidence, promote efficiency, and align the Nigerian market with global standards,” Jalo-Waziri said.
Analysts said the transition further ensures that all other tradable instruments across the Nigerian Exchange (NGX), NASD OTC Securities Exchange, and Lagos Commodities & Futures Exchange (LCFE) align with fixed income and commodity instruments which already operate a T+2 settlement cycle.
Analysts at United Capital said the transition was designed to give investors faster and smoother investing experience.
“What this means for you, as an investor: From November 28, all equity trades will settle two business days after you make them. If you buy shares or other equities on a Monday, your trade will settle by Wednesday. If you sell shares or other equities on a Monday, your money will also be available by Wednesday,” United Capital explained.
