SEC sets 5 p.m. T+1 deadline for equities, commodities settlement

The Securities and Exchange Commission (SEC) in Nigeria has set a strict settlement deadline of 5:00 p.m. on Trade Date plus One (T+1) for both equities and commodities transactions in the country's capital market. This directive was announced in a public notice on August 12, 2026, following earlier circulars issued in 2025 emphasizing the shift from the T+2 to the T+1 settlement cycle.

All transactions settled through the Central Securities Clearing System (CSCS) will be considered fully paid at the time of settlement, aligning with the standard Delivery versus Payment (DvP) procedure.

The SEC clarified that if a broker-dealer's trading account does not have sufficient funds to meet settlement obligations by the specified deadline, the default will be handled according to the CSCS Default Management Procedure and the relevant exchange's settlement guidelines. The regulator emphasized that foreign portfolio investors do not need to pre-fund their accounts for trades in Nigeria's capital market.

However, those facilitating transactions for foreign investors must ensure that adequate funds are available for settlement within the T+1 timeframe.

The transition to T+1 is anticipated to enhance settlement efficiency, decrease counterparty risk, boost liquidity, and bolster the competitiveness of the Nigerian capital market. This move follows the launch of the T+1 settlement cycle by the Central Securities Clearing System (CSCS) Plc in June, completing the shift from the previous two-day settlement framework.

The reduction in settlement time is expected to decrease counterparty exposure by minimizing the period during which a transaction could result in default before settlement, as well as decrease the volume of unsettled trades in the market.

Nigeria's capital market reform has advanced from T+3 to T+2 and now T+1, signifying a significant overhaul of the country's post-trade infrastructure. The SEC views this reform as part of a broader strategy to create a more efficient, resilient, and internationally aligned capital market, thereby enhancing Nigeria's appeal to both domestic and foreign investors.

The recent clarification provides market participants with precise guidelines and defines the obligations of brokers and other capital market operators under the T+1 framework.