SOME investors in the Nigerian stock market have expressed readiness for the T+1 settlement cycle transition commencing on May 29.
The News Agency of Nigeria (NAN) reports that the country had targeted May 29 to transition to T+1 settlement cycle from T+2 cycle currently in operation.
NAN reports that T+1 settlement cycle refers to the time between when a trade is executed in the market and when the buyer receives the securities while the seller receives the cash.
Under the T+1 settlement cycle, settlement occurs one business day after the trade date, the buyer and seller receive securities and cash respectively, one (1) day after trade is executed.
T+2 is the settlement cycle where the completion of a securities trade, including the transfer of ownership and payment, occurs two business days after the trade is executed.
Some of the investors and shareholders who spoke to NAN in Abuja on Monday, said the transition would ensure faster, safer and more efficient capital market.
Mrs Bisi Bakare, the National Coordinator, Pragmatic Shareholders’ Association, said the market was largely prepared for the transition though with some adjustment phases expected.
Bakare said that preparation for the transition was evident in the gradual technology upgrade by market operators.
She said that smaller brokers and retail participants may need time to fully adjust to the trade system.
” The T+2 cycle has already delivered an
improved liquidity faster reinvestment of funds.
”Other benefits of T+2 are reduced counterparty risk, greater market efficiency and transparency, alignment with global best practices.
”These benefits set the foundation for a smoother transition to T+1, which will further enhance market speed and competitiveness,”
she said.
Prince Ridhwan Hamza, Secretary General, Liberated Shareholders’ Association, said that markets in Western countries had adopted same day settlement.
He said the T+1 settlement cycle would help investors access their funds in good time.
”Honestly, I do not know why it took us this long to be talking about T+1 in 2026, when markets, especially in the west, have adopted same day settlement.
”The most important benefit is that it gives you access to your funds in good time thereby affording you the opportunity to further invest such on other ventures or vehicles,” he said.
Mr Moses Igbrude, the National Coordinator Independent Shareholders Association of Nigeria, said settlement cycle was a policy aimed at satisfying and delivering shareholders values.
Igbrude said the value was to ensure timely and effective market. (NAN)
