SEC DG harps on Risk Reduction, Investor Confidence

• As Nigeria moves to T+2 settlement cycle

The Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has said that Nigeria’s transition to a T+2 settlement cycle in the capital market will significantly enhance market efficiency, reduce risks, and strengthen investor confidence.

Speaking at a Trade Associations Roundtable on “Ensuring Stakeholder Readiness for T+2 Settlement” held in Abuja on Wednesday, Agama said the migration from the current T+3 to T+2 cycle represents a strategic step toward aligning Nigeria’s capital market with global best practices.

According to him, the move is not just a technical reform but a major mile stone that will make the Nigerian market more competitive and resilient.

He said: “A shorter settlement cycle is a hallmark of a mature, dynamic, and competitive market. It directly addresses several key objectives: It significantly reduces counterparty risk and market exposure. The less time between trade execution and final settlement, the lower the potential for a default to ripple through the system.

“It boosts market liquidity by returning capital to investors more quickly, allowing for its redeployment and fostering greater market activity. It aligns our market with international best practices, enhancing our attractiveness to foreign investment and reinforcing Nigeria’s position as a key player in the global financial arena.

“Ultimately, a more efficient and safer settlement system strengthens the bedrock of our market—investor confidence”.

Dr. Agama explained that by shortening the time between trade execution and final settlement, the T+2 system will lower market exposure and minimize the potential for defaults, adding that faster settlement would improve liquidity by returning capital to investors sooner, enabling them to reinvest and contribute to greater market activity.

He noted that many advanced markets are already moving toward T+1 settlements, adding that Nigeria must continue to evolve to remain globally relevant.

“The global financial landscape is constantly changing, driven by technology and investor demand for efficiency. The transition to T+2 is, therefore, a strategic imperative to keep our market competitive and future-ready,” he said.