CBN Confirms Full Deployment of S4 for Primary Auctions, Targets Secondary Market
The Central Bank of Nigeria (CBN) has confirmed the full deployment of its Scripless Securities Settlement System (S4) for all primary market auctions of government securities, marking a major step in the ongoing reform of Nigeria’s fixed-income market infrastructure.
The apex bank said the S4 platform is now the exclusive channel for conducting primary auctions of instruments such as Nigerian Treasury Bills and other Federal Government securities, with bids submitted electronically through authorised deposit money banks acting on behalf of investors. According to the CBN, the move is aimed at improving efficiency, transparency, and speed in the auction process, while eliminating manual and paper-based procedures that have historically slowed settlement and increased operational risk. The bank noted that the system has already been in use during recent auctions, but the latest announcement formally confirms its full operational status. Under the new framework, individual and institutional investors are required to participate in primary auctions through their banks, which interface directly with the S4 platform for bid submission, pricing, allocation, and settlement. Beyond the primary market, the CBN revealed that it is eyeing the expansion of S4 into the secondary market, where already-issued government securities are traded among investors. If implemented, the plan would allow both trading and settlement activities to take place on a unified electronic platform, potentially reshaping how fixed-income securities are bought and sold in Nigeria. The proposed secondary market integration forms part of the CBN’s broader, multi-phase effort to modernise the country’s financial market infrastructure and deepen liquidity in the fixed-income space. Market analysts say the initiative could enhance price discovery and improve investor confidence, particularly among foreign and institutional participants. However, the reforms have also sparked debate within the financial community, with some stakeholders raising concerns about regulatory overlaps, given that the Securities and Exchange Commission (SEC) traditionally oversees trading platforms, while the CBN regulates monetary operations and settlement systems. Despite the concerns, the CBN maintains that the S4 deployment is designed to strengthen market integrity and align Nigeria’s government securities market with global best practices.
