SEC sets 5pm cutoff for T+1 equities, commodities trade

The Securities and Exchange Commission (SEC) has set a 5:00pm deadline on the first business day following a transaction (T+1) as the settlement cutoff for equities and commodities traded through the Central Securities Clearing System (CSCS) in Nigeria. This directive was released in a circular on Wednesday, as part of the implementation of the T+1 settlement cycle in the Nigerian capital market.

All trades involving affected securities must be fully paid by 5:00pm T+1 to ensure compliance with the Delivery versus Payment settlement procedure.

The SEC emphasized that brokers/dealers must have adequate funds in their trading accounts to meet settlement obligations within the prescribed time. Failure to do so would result in default management as per the CSCS Default Management Procedure and the relevant exchange's transaction settlement guidelines.

Foreign portfolio investors are exempt from pre-funding their accounts for trades in the Nigerian market, but capital market operators dealing with such investors must establish robust controls to ensure timely funding and settlement completion. This clarification follows prior SEC circulars on the implementation of the T+2 settlement cycle for equities and the transition to T+1, announced on 3rd June 2025 and 15th May 2026, respectively.

The SEC stated that the transition to T+1 represents a significant step towards a more efficient, resilient, and internationally aligned trading environment. The shorter settlement cycle is expected to improve settlement efficiency, reduce counterparty risk, enhance liquidity, and bolster the competitiveness of the Nigerian capital market, making it more attractive to domestic and international investors.