SEC Sets November Deadline for T+2 Settlement Cycle, Aims for Faster, Safer Market
The Securities and Exchange Commission (SEC) of Nigeria has mandated that all capital market participants transition to a T+2 settlement cycle by November 28, 2025. This directive affects brokers, dealers, broker/dealers, and custodians, who must upgrade their systems and processes to comply. The change will shorten the time it takes to settle equity transactions from the current standard, aiming to improve market efficiency and reliability.
In a circular released on June 3, 2025, and titled ‘Implementation Of A New Settlement Cycle For Equities Transactions In The Nigerian Capital Market’, the SEC explained that the shift follows a comprehensive review of the current settlement framework. The decision also stems from extensive engagement with key stakeholders in the Nigerian capital market. The new T+2 rule means that trades executed on November 28 and beyond will settle within two business days.
Market operators have been urged to begin technical and operational preparations immediately. The SEC stressed the importance of readiness, warning that only full compliance will ensure a smooth transition. Investors are also advised to consult with brokers and financial advisers to understand the implications of the shortened settlement timeline for their investment strategies.
The commission outlined several benefits of adopting the T+2 cycle. These include enhanced liquidity through quicker access to funds, reduced counterparty risk due to shorter settlement windows, and greater global competitiveness by aligning Nigeria’s practices with international standards. The SEC believes the move will improve both the security and attractiveness of the Nigerian capital market.
Ultimately, this transition is part of broader reforms aimed at modernizing Nigeria’s financial infrastructure. By November 28, 2025, the SEC expects a more agile, secure, and investor-friendly market, laying the groundwork for increased participation from both local and international investors.
Source: Leadership