The Securities and Exchange Commission (SEC) of Nigeria has announced that the country’s equities market will officially transition to a T+2 settlement cycle—where transactions are settled two days after the trade date—beginning November 28, 2025.
This development marks a significant shift from the current settlement structure and aims to enhance market efficiency, reduce systemic risk, and align Nigeria’s capital market with global best practices.
In a notice issued Tuesday, the SEC directed all market participants—including brokers, dealers, broker/dealers, and custodians—to update their systems and processes ahead of the deadline to ensure a seamless transition.
“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,” the Commission said.
The decision follows a comprehensive review of Nigeria’s current settlement framework and extensive stakeholder engagements, according to the regulator.
What is T+2?
The T+2 settlement cycle—short for “trade date plus two days”—means that once a trade is executed, the buyer must pay and the seller must deliver the security within two business days. This is a faster alternative to longer settlement periods and is widely used in major global markets.
Why It Matters
The SEC highlighted three main benefits of adopting T+2:
- Improved Liquidity: Faster settlements mean investors can access their funds sooner, boosting market turnover.
- Risk Mitigation: Shorter settlement windows reduce counterparty risk, helping to stabilize the financial ecosystem.
- Global Alignment: The move aligns Nigeria’s market with international norms, making it more attractive to foreign investors.
Advisory to Investors
The SEC has also urged investors to engage their brokers and investment advisers to understand how the migration could affect their investment activities and strategies.
“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,” the notice added.
The Commission said it expects the migration to positively reshape the profile of the Nigerian capital market, positioning it for greater competitiveness and integration with global financial systems.
The move comes as part of broader efforts to modernize Nigeria’s financial markets and follows recent regulatory developments including the Investment and Securities Act 2024.
Market participants are expected to intensify preparations over the coming months, with many industry players viewing the transition as a long-overdue reform to improve confidence and operational efficiency in the Nigerian stock market.
