Nigeria advances toward T+1 settlement as SEC announces sweeping market reforms

Barbara Bako, Abuja.

Nigeria is moving closer to a T+1 and eventually T+0 settlement cycle as the Securities and Exchange Commission (SEC) rolls out a broad set of reforms aimed at strengthening market efficiency, deepening investor confidence and accelerating digital transformation...

The SEC Director-General, Dr. Emomotimi Agama, announced the measures on Friday during the second Capital Market Committee (CMC) meeting for 2025.

He said the shift from T+3 to T+2 settlement for equities, which took effect on November 28, represents a major milestone for the Nigerian market and aligns operations more closely with global standards.

Agama said the shorter settlement window will boost liquidity, reduce counterparty risk and improve the speed of capital reinvestment across the Nigerian Exchange (NGX), NASD OTC Securities Exchange and Lagos Commodities and Futures Exchange.

He highlighted key developments since the last CMC meeting in May, including Nigeria’s sovereign credit rating upgrade and the country’s removal from the FATF grey list two outcomes he said have bolstered investor sentiment and improved prospects for capital inflows.

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Inflation has also eased to 16.05 per cent year-on-year as of October, the lowest reading since March 2025.

Between April and October, the Commission approved significant capital-raising activities across the debt, equity and commercial paper markets.

Notable issuances include the N500bn Climate Funding SPV and the N200bn Elektron Finance bond programme, reflecting rising appetite for infrastructure and green finance.

The commercial paper segment remained active with over N753bn raised across manufacturing, energy and agriculture.

Agama acknowledged that the NGX suffered its steepest monthly decline on record in November, losing N6.54trn in market capitalization as the All-Share Index fell nearly 7 per cent.

He attributed the downturn to profit-taking ahead of the proposed 30 per cent capital gains tax, weakened bank stock sentiment and broader policy uncertainties.

He said the market has since shown resilience, recording modest recovery following government assurances on fiscal and tax reforms, and remains firmly positive year-to-date.

The Commission is intensifying investor education efforts, including integrating capital market studies into the national secondary school curriculum in partnership with the Nigerian Educational Research and Development Council.

At tertiary level, SEC collaborated with Nnamdi Azikiwe University on a conference focused on helping SMEs leverage market opportunities.

Regionally, the SEC engaged a Bank of Ghana delegation on non-interest capital markets, spotlighting Nigeria’s N1.4trn sovereign Sukuk and the expansion of Islamic mutual funds while plans are underway for a Municipal Bond and Sukuk Summit in early 2026.

Agama outlined ongoing work to deepen the commodities ecosystem, including collaboration with the Standards Organisation of Nigeria on commodity standards, work with insurance brokers on risk mitigation, and engagement with the Ministry of Solid Minerals to unlock financing for mining firms.

The SEC is also in discussions with the Central Bank of Nigeria to secure liquidity status for warehouse receipts.

The Commission is updating rules under the Investments and Securities Act (ISA) 2025 for commodity exchanges, warehouse operators and collateral managers.

Engagements with exchanges such as Gezawa and NCX have helped revive their activities, he said.

In the derivatives space, the SEC is working with stakeholders to deploy real-time surveillance tools to strengthen market integrity.

Updated rules on central counterparty operations, derivatives trading, online forex and NG Clearing have been submitted for review, with a draft systemic risk management rule underway.

Agama also highlighted the SEC’s technology-driven regulatory reforms. Through the Digital Transformation Portal, operators can now submit applications and track approvals online.

A commercial paper issuance module has been launched, and automation of periodic filings is ongoing.

He said a recent tech adoption survey showed strong interest in AI, blockchain and regulatory technology despite challenges with cost, skills and legacy systems.

The SEC is set to introduce a Harmonized Corporate Governance Reporting Template to streamline disclosures for public companies and reduce compliance burdens by aligning reporting under the SEC rules, the Nigerian Code of Corporate Governance 2018 and the Business Facilitation Act 2022.

Agama announced that registration renewal for capital market operators will hold from January 1 to 31, 2026, while electronic submission and processing of registration applications will begin in the first quarter of 2026.

He reaffirmed the Commission’s commitment to building a resilient, transparent and innovation-driven market, saying: “A strong capital market is not built in a day; it is shaped by vision, collaboration and resilience.”