New Equities Settlement Cycles Will Align Capital Market With Global Standards – Amolegbe
As the Nigerian capital market prepares to transition to a T+2 (Trade plus Two days) settlement cycle for equity transactions, market stakeholders are describing the move as a significant milestone that aligns Nigeria with international best practices and enhances investor confidence.
Speaking on the development, Managing Director/Chief Executive Officer of Arthur Steven Asset Management Limited and a past president of the Chartered Institute of Stockbrokers (CIS), Mr Tunde Amolegbe, in an exclusive chat with THE WHISTLER, lauded the transition as “a positive and overdue move”, noting that T+2 is already the global standard across major financial markets.
“The move to T+2 for equities is not only desirable; it is necessary,” said Amolegbe. “It aligns our market with leading global exchanges and enhances the ease with which both domestic and international investors can participate in the Nigerian capital market.”
Amolegbe emphasised that the technology infrastructure to support T+2 settlement is already in place through the Central Securities Clearing System (CSCS), Nigeria’s clearing and settlement platform, thus making the implementation feasible without major operational overhauls.
One of the key advantages, he said, is the enhancement of market liquidity. The bond market in Nigeria already operates on a T+2 settlement cycle. By synchronising the equity market to the same timeline, investors will now be able to seamlessly switch between equities and fixed-income instruments within their portfolios without facing settlement mismatches.
“This synchronisation improves efficiency and flexibility. For example, an investor can now sell equities and reinvest the proceeds in fixed income, or vice versa, without delays or risks associated with differing settlement periods,” Amolegbe explained.
Harmonisation is also expected to boost participation from foreign investors. Global portfolio managers prefer markets that conform to standard settlement practices. A T+2 settlement structure removes a previous friction point that may have discouraged foreign inflows.
“Foreign investors will now be able to sync Nigerian trades within their broader global portfolios more easily,” Amolegbe noted. “When all markets in a portfolio operate under similar timelines, it’s easier to manage cash flow, risk, and exposure. This alignment could significantly boost Nigeria’s appeal to offshore institutional investors.”
While welcoming the development, Amolegbe also expressed optimism that Nigeria would not stop at T+2 but continue progressing toward T+1 settlement for all securities, which is already under consideration in developed markets like the United States and India.
“My hope is that we move quickly towards a T+1 cycle, which would further enhance market dynamism, reduce counterparty risk, and increase competitiveness,” he said. “As our infrastructure and market maturity improve, this should be the next logical step.”
The Nigerian Exchange (NGX) has recently intensified efforts to deepen market reforms, improve post-trade processes, and align with global standards in a bid to increase investor confidence and expand market participation.
Industry watchers believe that the successful implementation of T+2 will mark another significant step in Nigeria’s capital market evolution, fostering a more resilient, attractive, and globally competitive investment environment.
The Securities and Exchange Commission recently announced that the Nigerian capital market will transition to a T+2 settlement cycle for equities transactions from November 28, 2025.
According to the SEC, the change follows a review of the current settlement cycle and extensive consultations with stakeholders, the commission said in a circular issued on Tuesday.
Under the new system, equities transactions will now be settled two business days after the trade date, instead of the current T+3 cycle. This move aligns the Nigerian capital market with global standards and is expected to enhance market liquidity, reduce counterparty risk, and make Nigeria a more attractive investment destination.
The circular read, “The T+2 settlement cycle for equities transactions will take effect on November 28, 2025. This connotes that transactions executed on that day will be settled using the T+2 cycle.”
According to the SEC, the migration is aimed at improving the overall market infrastructure. “An expedited settlement process allows investors to access their funds more quickly and enhances market liquidity,” the commission stated.
New Equities Settlement Cycles Will Align Capital Market With Global Standards – Amolegbe is first published on The Whistler Newspaper
