The Managing Director and Chief Executive Officer of the Central Securities Clearing System (CSCS), Shehu Yahaya Shantali
Nigeria’s capital market has recorded a landmark achievement with the successful transition from a T+2 to a T+1 settlement cycle, a move expected to enhance market efficiency, improve liquidity, reduce risks, and strengthen investor confidence.
Speaking at the official commemoration of the milestone in Lagos, the Managing Director and Chief Executive Officer of the Central Securities Clearing System (CSCS), Shehu Yahaya Shantali, described the development as a defining moment in the evolution of Nigeria’s capital market and the culmination of over three decades of sustained modernization efforts.
Shantali said the transition reflects years of investment in technology, operational reforms, stakeholder collaboration, and a collective commitment to positioning Nigeria’s capital market among the world’s leading investment destinations.
According to him, the Nigerian capital market has undergone a remarkable transformation from an era when transactions were largely manual and investors waited between three and six months to receive share certificates following trades.
“Today’s transition to T+1 settlement is not a single event but the latest chapter in a modernization journey that has been underway for more than three decades. It is the result of years of investment, innovation, stakeholder collaboration, and a shared commitment to excellence,” he said.
From Paper Certificates to Digital Settlement
Shantali recalled that before the establishment of CSCS, the Nigerian capital market relied heavily on paper documentation, resulting in lengthy settlement periods, operational inefficiencies, unclaimed dividends, unclean share certificates, and declining investor confidence.
To address these challenges, CSCS was incorporated in 1992 as Nigeria’s central securities depository with a mandate to automate clearing, settlement, and custody services.
When the organization commenced operations in April 1997, settlement timelines were reduced from several months to T+5, marking a significant breakthrough in market efficiency and laying the foundation for the dematerialization of securities.
The market later transitioned to a T+3 settlement cycle in March 2000, which further improved liquidity, reduced settlement risks, and enhanced investor confidence.
For over two decades, the T+3 framework served the market effectively. However, growing technological advancements, increased global market integration, and rising investor expectations necessitated further reforms.
This led to the migration to T+2 settlement in November 2025 and, ultimately, the successful implementation of T+1 settlement in 2026.
Three Years of Industry Collaboration
The CSCS Managing Director disclosed that preparations for the transition formally began in 2023 when the Securities and Exchange Commission (SEC) inaugurated the Settlement Cycle Review Committee to assess the market’s readiness for a shorter settlement cycle.
The committee brought together representatives from all segments of the capital market ecosystem, including exchanges, stockbrokers, custodians, registrars, fund managers, settlement banks, and market associations.
Over three years, stakeholders conducted extensive consultations, technology assessments, operational reviews, market simulations, and implementation planning exercises to ensure a seamless migration.
Shantali commended the SEC, committee members, and industry stakeholders for their unwavering commitment to the project.
He also acknowledged the contributions of the Nigerian Exchange (NGX), NASD, Lagos Commodities and Futures Exchange, the Association of Securities Dealing Houses of Nigeria (ASHON), the Association of Asset Custodians of Nigeria (AACN), the Institute of Capital Market Registrars (ICMR), the Chartered Institute of Stockbrokers (CIS), and other market operators whose feedback helped shape the implementation framework.
Technology Investments Drive Market Transformation
According to Shantali, CSCS invested heavily in infrastructure modernization to support the transition and strengthen the market’s long-term competitiveness.
The investments include API-enabled market integrations, enhanced straight-through processing capabilities, digital self-service platforms, custodian connectivity solutions, automated share dematerialization processes, upgraded settlement engines, expanded business continuity systems, and strengthened cybersecurity infrastructure.
He noted that these initiatives have improved market connectivity, enhanced operational resilience, accelerated transaction processing, and expanded integration with global financial messaging standards.
“These investments were not made solely to support T+1 settlement. They were designed to position Nigeria’s capital market for sustained growth and long-term competitiveness,” he said.
Benefits for Investors and the Economy
Industry stakeholders believe the new settlement framework will deliver significant benefits across the financial ecosystem.
A shorter settlement cycle reduces counterparty risk by minimizing the period between trade execution and settlement. It also improves liquidity by enabling investors to access and redeploy funds more quickly.
Shantali said T+1 settlement will improve operational efficiency, strengthen investor confidence, and enhance the resilience of Nigeria’s financial system.
For institutional investors, the reform provides faster access to capital and greater certainty in transaction completion, while retail investors will enjoy a more efficient and seamless investment experience.
Analysts say the development is expected to boost both domestic and foreign investor participation, further deepening Nigeria’s capital market and supporting broader economic growth.
Aligning with Global Best Practices
The CSCS boss noted that several advanced economies, including the United States, Canada, and India, have already adopted T+1 settlement systems, while many other markets are moving toward even shorter settlement cycles.
He said Nigeria’s successful transition demonstrates the country’s readiness to compete confidently among leading global financial markets and reinforces its commitment to international best practices.
According to him, discussions around same-day and real-time settlement environments are already gaining momentum globally, making continuous innovation imperative.
The Road Ahead
While celebrating the achievement, Shantali emphasized that the journey toward a world-class capital market is far from complete.
He reaffirmed CSCS’s commitment to driving the next phase of market evolution through continuous investment in technology, infrastructure, cybersecurity, operational resilience, and stakeholder collaboration.
“The journey from paper certificates to multiple settlement cycles and now T+1 settlement has been remarkable. It reflects decades of vision, perseverance, collaboration, and innovation. Together, we have built a stronger market, strengthened investor confidence, and positioned Nigeria’s capital market for greater competitiveness and sustainable growth,” he said.
He added that CSCS remains committed to supporting initiatives that improve efficiency, transparency, and investor experience as Nigeria’s capital market continues its modernization journey.
Nigeria’s capital market has achieved a major milestone with the transition to T+1 settlement. CSCS Managing Director Shehu Yahaya Shantali says the move will boost liquidity, reduce risks, improve investor confidence, and align Nigeria with global standards.
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