BRVM Considers Switch to Real-Time Settlement in Major Market Reform
TLDR
- The BRVM is evaluating a shift from the current T+3 securities settlement cycle to T+0, or same-day settlement
- The reform would allow investors to access cash or securities immediately after a trade, boosting liquidity and reducing counterparty risk
- However, it would also require major upgrades to infrastructure, real-time payment systems, and coordination between banks, brokers, and custodians
The Central Depository/Settlement Bank (DC/BR), which operates settlement for the West African Economic and Monetary Union (WAEMU) stock market BRVM, is evaluating a shift from the current T+3 securities settlement cycle to T+0, or same-day settlement. This would mark a major overhaul for the region’s financial infrastructure.
The reform would allow investors to access cash or securities immediately after a trade, boosting liquidity and reducing counterparty risk. However, it would also require major upgrades to infrastructure, real-time payment systems, and coordination between banks, brokers, and custodians.
"What we gain in speed, we must also guarantee in security," notes a market professional based in Abidjan, quoted by Ecofin Agency, reflecting the balance WAEMU must strike between ambition and practicality.
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Points clés à retenir
The push to accelerate trade settlement cycles is part of a global trend. The U.S. officially moved to T+1 in May 2024, with Europe and the U.K. expected to follow by 2027. Some Indian transactions are already executed on a T+0 basis. For emerging markets like WAEMU, remaining on T+3 risks reducing competitiveness and deterring investor participation. But a direct leap to T+0 is not without risk. Experts warn that rigid banking hours, limited real-time connectivity, and manual settlement systems present major barriers in developing markets. The BRVM’s ecosystem, which still relies in part on paper-based processes, will need structural reforms, regulatory updates, and intensive technical training. Despite these challenges, stakeholders are optimistic about the long-term benefits, including increased trading volume and enhanced foreign investor confidence. Most experts suggest a gradual shift—progressing from T+3 to T+2, then to T+1, and finally T+0—as a more feasible path for WAEMU.
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