SEC DG: Nigeria’s transition To T+2 Settlement Cycle’ll Reduce Risks

Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has said that Nigeria’s modulation to a T+2 colony rhythm successful the superior marketplace volition importantly heighten marketplace efficiency, trim risks, and fortify capitalist confidence.

He  made the connection astatine a commercialized associations roundtable connected “Ensuring Stakeholder Readiness for T+2 Settlement” held successful Abuja connected Wednesday, according to a connection that was issued by the commaaion. Agama said the migration from the existent T+3 to T+2 rhythm represents a strategical measurement toward aligning Nigeria’s superior marketplace with planetary champion practices.

According to him, the determination is not conscionable a method betterment but a large milestone that volition marque the Nigerian marketplace much competitory and resilient.

He said: “A shorter colony rhythm is simply a hallmark of a mature, dynamic, and competitory market.” The caller outgo colony straight addresses respective cardinal objectives: It importantly reduces counterparty hazard and marketplace exposure. The little clip betwixt commercialized execution and last settlement, the little the imaginable for a default to ripple done the system.

It is expected to boost marketplace liquidity by returning superior to investors much quickly, allowing for its redeployment and fostering greater marketplace activity. The SEC DG acknowledged that the caller strategy aligned “our marketplace with planetary champion practices, enhancing our attractiveness to overseas concern and reinforcing Nigeria’s presumption arsenic a cardinal subordinate successful the planetary fiscal arena.

“Ultimately, a much businesslike and safer colony strategy strengthens the bedrock of our market—investor confidence”.

Dr. Agama explained that by shortening the clip betwixt commercialized execution and last settlement, the T+2 strategy volition little marketplace vulnerability and minimize the imaginable for defaults, adding that faster colony would amended liquidity by returning superior to investors sooner, enabling them to reinvest and lend to greater marketplace activity.

He noted that galore precocious markets are already moving toward T+1 settlements, adding that Nigeria indispensable proceed to germinate to stay globally relevant.

“The planetary fiscal scenery is perpetually changing, driven by exertion and capitalist request for efficiency. The modulation to T+2 is, therefore, a strategical imperative to support our marketplace competitory and future-ready,” helium said.

The SEC brag emphasized that the occurrence of the modulation depends connected the corporate readiness of each marketplace participants — from brokers and custodians to clearing houses and investors. He urged commercialized associations to instrumentality a starring relation successful preparing their members for the operational and technological changes that the caller strategy volition require.

“Your readiness and that of your members is the azygous astir important determinant of our success. This means recalibrating back-office operations, upgrading exertion systems, streamlining colony processes, and ensuring that each marketplace participants are informed and prepared,” helium said.

Dr. Agama assured stakeholders that the Commission would enactment intimately with commercialized associations, marketplace operators, and Financial Market Infrastructures specified arsenic the Nigerian Exchange Limited and the Central Securities Clearing System to guarantee a creaseless and coordinated transition.

He said the committee would besides intensify capitalist acquisition and consciousness campaigns to guarantee that each marketplace participants recognize the implications and benefits of the change.

“The determination to T+2 is simply a indispensable leap guardant for the Nigerian superior market. It is simply a testament to our corporate ambition to physique a marketplace that is efficient, resilient, and globally competitive,” helium stated.

Agama called connected stakeholders to prosecute constructively and collaboratively to place imaginable bottlenecks, stock champion practices, and hold connected a wide roadmap for implementation.

He reaffirmed SEC’s committedness to providing the indispensable regulatory enactment and guidance, urging each marketplace participants to enactment unneurotic to marque the T+2 modulation a “resounding occurrence and a arrogant milestone” for Nigeria’s fiscal markets.