SEC sets Nov. deadline for T+2 settlement cycle for equities transactions

Emomotimi Agama, Director General of the Securities and Exchange Commission (SEC)

Nigeria’s Securities and Exchange Commission (SEC) has set November 28 deadline for all market participants, including brokers, dealers, broker/dealers and custodians to update their systems and processes to ensure the effective implementation of the new settlement cycle “T+2” (that is trade date plus two days).

While noting that the equities segment of the market would transition to a T+2 settlement cycle, the SEC said this decision is further to a comprehensive review of the current settlement cycle in the Nigerian capital market and extensive engagements with stakeholders.

“The T+2 settlement cycle for equities transactions would take effect on November 28, 2025. This connotes that transactions for November 28, 2025 would be settled via a T+2 cycle,” SEC said in a June 3 notice.

“All market participants, including brokers, dealers, broker/dealers and custodians, are required to update their systems and processes to ensure the effective implementation of the new settlement cycle.

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“Investors are advised to consult with their brokers and investment advisers to understand how the new settlement cycle may impact their transactions and investment strategies,” SEC said.

“The Commission expects this migration to have a significant impact on the profile of the Nigerian Capital market by enabling: Improved Liquidity: An expedited settlement process, which allows investors to access their funds more quickly and enhance overall market liquidity.

Risk Mitigation: Reduction of exposure to counterparty risk, thereby contributing to a more stable and resilient market. Global Alignment: Alignment with international best practice, which repositions Nigeria as a more competitive and attractive destination for both domestic and foreign investors,” SEC said.

“T+2” or “trade date plus two days” settlement cycle means that when you sell a stock, the seller must deliver the purchased security and the buyer must make payment on the second exchange day after the occurrence of the exchange transaction.

Iheanyi Nwachukwu

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.