Kenya’s Central Depository and Settlement Corporation which provides clearing, settlement and depository services for listed securities will launch same day settlement by April next year. What this means is that sellers will get proceeds of a sale of shares the very day the sale is executed. Unlike the current system which takes three days after a trade is executed. The implementation is however subject to regulatory approval from the Capital Markets Authority.
This development shows the slow innovation process in the Nigerian Stock Exchange. The Kenyan Exchange was founded in 1954, and the Nigerian bourse in 1960. Making both exchanges contemporaries. The Nigerian exchange introduced a weekly settlement cycle in 1996 and introduced the T+3 settlement cycle in March 2000. It has remained on that cycle since then.
While there has been talk of moving to the same day trading cycle, no concrete step has been made. The initial reasons given for maintaining the T+3 system, was to avoid fraud on the part of the stock brokers and the laborious process of fund transfer then. Improvement in technology and closer monitoring of brokers by both the exchange and sec have made the current system no longer tenable. One hopes the Nigerian exchange will adapt current settlement cycles like Kenya has done.
We already there in our market you can buy and sale same day . They are not ahead in term of stocks. Kurfi of Apt