Capital market: ASHON Chairman hails CSCSsettlement cycle

… urges brokers to strengthen liquidity management

By Peter Egwuatu

The Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), Sehinde Adenagbe, has described the newly introduced T+1 settlement cycle by CSCS PLC as a transformative development for Nigeria’s capital market, noting that it will enhance market efficiency, reduce settlement risks, and boost investor confidence.
Speaking on the implications of the new settlement framework, Adenagbe said the transition to T+1 settlement marks a significant milestone in the evolution of Nigeria’s securities market and will require stockbroking firms to adapt quickly to a faster settlement environment.

According to him, the initiative will fundamentally change trade processing dynamics across brokerage firms, placing greater emphasis on operational efficiency, liquidity management, and technology-driven processes.

“The T+1 settlement cycle is a major reform that will improve market efficiency and strengthen the integrity of the trading ecosystem. However, it also raises operational expectations for brokers, who must now maintain near real-time settlement readiness, stronger liquidity buffers, and more automated post-trade processes,” he said.

Adenagbe noted that one of the key benefits of the new regime is the reduction of counterparty and settlement risks, as transactions will now be completed within one business day after execution. He added that the shorter settlement period would improve market confidence by enabling faster movement of cash and securities.
While acknowledging the long-term advantages of the initiative, the ASHON Chairman pointed out that brokers would need to adjust their liquidity management strategies to cope with the shorter settlement window.

“The long-term gains are substantial, including lower settlement risk, improved market confidence, and greater operational efficiency. Nonetheless, brokerage firms must be proactive in managing liquidity and strengthening internal processes to ensure seamless compliance with the new settlement cycle,” he stated.

He commended the Securities and Exchange Commission (SEC) for approving the transition and the Board and Management of CSCS PLC for driving the reform, describing it as a strategic step toward aligning Nigeria’s capital market infrastructure with global best practices.

Adenagbe expressed confidence that the T+1 settlement cycle would enhance the attractiveness of the Nigerian capital market to both domestic and international investors by improving efficiency, transparency, and overall market resilience.

The T+1 settlement cycle, recently implemented by CSCS PLC, reduces the settlement period for securities transactions from two business days to one, representing one of the most significant post-trade reforms undertaken in the Nigerian capital market in recent years.

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