No settlement default recorded since T+1 adoption — SEC
By Obas Esiedesa, Abuja
ABUJA — The Securities and Exchange Commission, SEC, has disclosed that no settlement default has been recorded since Nigeria migrated to the T+1 settlement cycle, saying the transition has been smooth and well received by local and international investors.
The Director-General of the SEC, Dr Emomotimi Agama, disclosed this to journalists in Abuja at the weekend.
Agama, who was represented by the Director, Registration, Exchanges and Market Infrastructure, Mrs Hafsat Rufai, said concerns that investors might struggle to raise funds within the shorter settlement period had not materialised.
He said feedback from both local and international investors had been “excellent”, adding that the decision to set the settlement deadline at 5:00 p.m. had provided sufficient time for investors and custodian banks to meet their obligations.
“Knowing that it is not at 8:00 a.m., it is 5:00 p.m., I think that gives enough time for the custodian banks, who are representatives of those investors, to source the funds required and settle the securities and cash as well, because it’s a DVP market. It’s delivery versus payment,” Agama said.
According to him, no default arising from the unavailability of funds for settlement has been recorded since the adoption of T+1.
“It’s just a matter of letting everybody understand that the settlement time is not 8:00 a.m.; it is 5:00 p.m. And by 5:00 p.m., everybody is good. So far, it has been good. Feedback has also been very excellent,” he said.
Agama explained that the Nigerian capital market had operated on a T+3 settlement cycle for several years before the regulator began a phased reduction of the settlement period to modernise the market, improve its competitiveness and attractiveness, enhance liquidity and reduce settlement risks.
He said the market migrated from T+3 to T+2 on November 28, 2025, before moving to T+1 on June 1, 2026.
“Transaction day or the trade day when your shares are bought or sold on a particular day, that is day T, and then plus one, which is the current settlement cycle, means that when you buy your shares, say for instance you buy today, being a Monday, the shares will settle in your account by 5:00 p.m. tomorrow,” he explained.
Agama said shortening the settlement cycle was intended to make the market more efficient by reducing the period investors had to wait before receiving their securities or cash.
He explained that under the previous T+2 arrangement, investors had to wait until 8:00 a.m. two days after a transaction to receive their securities or cash.
“The emphasis on 5:00 p.m. is that over the years, when you were on T+3 or T+2, settlement time was 8:00 a.m. Meaning that if you buy your shares today on T+2, that is the trade date, and then two days after, which would have been Wednesday when you were on T+2, you would get your shares if you bought or you get your cash if you sold at 8:00 a.m.
“Now we decided that we need to do better for the Nigerian market by shortening that cycle. So why buy today and wait for another 48 hours or thereabout, or two days, before you get your security? So, we shortened that transaction cycle, or settlement cycle, I beg pardon, to T+1, meaning that the trade day and a day after, that’s the first step.”
He further said the decision to fix the settlement deadline at 5:00 p.m., rather than 8:00 a.m., was informed by the extension of trading hours on the Nigerian Exchange, NGX.
According to him, trading hours were extended from 2:30 p.m. to 4:00 p.m. earlier in the year, making the previous 8:00 a.m. settlement deadline impractical under the new T+1 arrangement.
“If you recall, we extended trading hours earlier this year from 2:30 to 4:00 p.m. at the NGX, and then we thought, if market closes at 4:00 and we ask people to settle, that is, to provide cash and securities, at 8:00 a.m. the next day, that kind of close to being T+0 is almost as good as just telling me to pay today, and we don’t want that strain,” he said.
The post No settlement default recorded since T+1 adoption — SEC appeared first on Vanguard News.