The capital market has taken a major step forward with the shift to a T+1 settlement cycle, a reform expected to make trading faster, smoother and more aligned with global practice.

With the change effective from June 1, investors will now see their transactions completed within one business day, down from the previous two-day settlement timeline.

The transition was driven by key market institutions.

They include the Nigerian Exchange Ltd, the Central Securities Clearing System Plc, the Securities and Exchange Commission of Nigeria, and other stakeholders in the financial ecosystem.

Speaking at the T+1 settlement cycle transition ceremony organised by CSCS in Lagos on Monday, its managing director, Shehu Shantali, said the development would enhance market efficiency and investor confidence.

Mr Shantali said the shorter settlement cycle reduces counterparty risk by limiting the time between trade execution and settlement. He added that it improves liquidity by enabling investors to access and reinvest capital more quickly, thereby strengthening the financial system’s resilience.

According to him, institutional investors will benefit from faster access to funds and improved settlement certainty, while retail investors will enjoy a more efficient investment experience.

Mr Shantali noted that the journey towards T+1 reflects decades of market reforms, beginning with manual processes and physical share certificates, during which investors waited months for confirmation of transactions. He noted that prior to the establishment of CSCS in 1997, settlement cycles could stretch between three and six months.

The introduction of CSCS operations in April 1997 reduced settlement time to T+5 and eliminated reliance on physical certificates, while subsequent reforms led to a T+3 cycle in March 2000 and, later, T+2 in November 2025.

He said the move to T+1 now places Nigeria closer to advanced global markets.

Mr Shantali commended the SEC for providing regulatory leadership, particularly under its director-general, Emomotimi Agama, as well as contributions from market institutions, including NASD Plc and the Lagos Commodities and Futures Exchange.

Also, Mr Agama said the transition would reduce settlement risks, improve liquidity and strengthen investor confidence. He noted that major markets such as the United States, Canada and Mexico adopted T+1 in 2024, while India implemented phased reforms between 2022 and 2023.

According to him, markets operating on a T+1 basis now account for about 60 per cent of global market capitalisation.

“The T+1 settlement cycle is now live, and with it, a new era has begun,” he said, adding that the milestone would be viewed as a defining moment in Nigeria’s capital market history.

Chairman of NGX Group, Umaru Kwairanga, congratulated market operators on the achievement, describing it as a step toward a stronger and more competitive financial system. He said efforts would continue to deepen market participation and make investing more seamless and accessible for both local and international investors.

Chairman of CSCS, Temi Popoola, also commended stakeholders for their collaboration in achieving the transition. He said ongoing reforms would focus on strengthening trading infrastructure, data systems and operational processes to support increased market activity.

Mr Popoola added that attention was expanding beyond equities to include private markets, fixed income and digital assets. He called on stakeholders to sustain support for reforms aimed at positioning the Nigerian capital market for long-term growth and global competitiveness.

The event attracted regulators, market operators and financial institutions across the capital market ecosystem.

(NAN)