Nigeria’s capital market is set for a structural upgrade as the Central Securities Clearing System (CSCS) confirms that the nation will officially adopt a T+2 settlement cycle for all equity transactions.
The new rule, scheduled to commence on November 28, represents one of the most important reforms in recent years and is expected to improve liquidity, strengthen investor confidence, and modernise post-trade processes across the market.
Under the new framework, every executed trade on the Nigerian Exchange (NGX) will now be completed two business days after the transaction date.
This timeline, commonly referred to as T+2, determines when a buyer gains ownership of the purchased shares and when the seller receives payment for the transaction.
The current settlement system takes longer, extending the period between trade execution and final settlement.
Market operators describe the shift to T+2 as a major step toward improving efficiency. A shorter settlement window means investors no longer wait several days before accessing the proceeds of a sale or taking full possession of their purchased securities.
With this reduced timeframe, the system lowers exposure to counterparty risk — the possibility that one side of a trade may fail to meet its obligation before settlement is completed.
The introduction of the new settlement period also aligns Nigeria with standards already in place across major financial markets.
Countries in Europe, Asia and North America have long operated on T+2, with some advanced markets beginning to explore an even shorter T+1 cycle.
Nigeria’s adoption of T+2 is therefore seen as an important step toward improving the country’s competitiveness in the eyes of global investors.
For traders and portfolio managers, the new cycle offers faster cash movement, more efficient reinvestment planning and potential improvement in market turnover. Analysts say the timing of the reform is critical, as liquidity constraints and settlement delays have long been cited by foreign and domestic investors as barriers to deeper participation in Nigerian equities.
Ahead of implementation, brokers, custodians, and other market institutions have been upgrading their systems to accommodate the accelerated settlement period.
CSCS has also issued operational guidelines covering transaction timing, default-management procedures and compliance expectations for all market participants.
Industry stakeholders believe that once the new cycle stabilises, the market will experience faster processing of trades, improved transparency, and enhanced confidence in the post-trade environment.
They note that the benefits may gradually reflect in higher trading volumes, better market depth and stronger interest from institutional investors, particularly those who rely on predictable and efficient settlement frameworks.
Nigeria’s capital market has been undergoing various upgrades aimed at deepening participation and strengthening post-trade operations.
The transition to T+2 adds to ongoing reforms across regulation, technology, data management and investor protection.