By Peter Egwuatu
The Securities and Exchange Commission (SEC) has said the adoption of the T+1 settlement cycle in Nigeria’s capital market is going on smoothly, describing it as a development that has enhanced competitiveness and provided relief to market participants.
Disclosing this in a media chat in Abuja last weekend, Director, Registration, Exchanges and Market Infrastructure, Mrs. Hafsat Rufai, said both local and international investors had expressed satisfaction with the new settlement cycle.
She stated: “Feedback from them has been excellent. They are happy with T+1, and the local investors are also happy with T+1. The fear initially was around the availability of cash to settle, time zone being one of the major considerations.
“Sometimes, in some countries, when we are closing our market at 4:00 p.m., it is still early in the day. Sometimes, it’s even longer than being early in the day; it’s midnight in some countries. And so everybody is concerned about how to source cash or how to source funds for settlement.
“But knowing that it is not at 8:00 a.m., it is 5:00 p.m., I think that gives enough time for the custodian banks, who are representatives of those investors, to source the funds required and settle the securities and cash as well, because it’s a DVP market. It’s delivery versus payment.”
According to her no default had so far been recorded due to the unavailability of funds for settlement at the new deadline.
She stated further: “It’s just a matter of letting everybody understand that the settlement time is not 8:00 a.m.; it is 5:00 p.m. And by 5:00 p.m., everybody is good. So far, it has been good. Feedback has also been very excellent.”
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