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

The Securities and Exchange Commission (SEC) has set 5:00 p.m. on Trade Date plus One (T+1) as the settlement deadline for equities and commodities transactions in Nigeria’s capital market.

The Commission disclosed this in a public notice signed by its management on August 12, 2026, providing further clarification on the implementation of the T+1 settlement cycle.

The latest directive builds on the SEC’s earlier circulars issued on June 3, 2025, on the T+2 settlement framework and May 15, 2026, on the transition to T+1.

What they are saying

The SEC said all equities and commodities transactions settled through the Central Securities Clearing System (CSCS) will be deemed fully paid at the time of settlement to ensure compliance with the standard Delivery versus Payment (DvP) procedure.

• “The Commission hereby clarifies that settlement time for equities and commodities settled at CSCS is 5:00 p.m. T + 1 (Trade date plus one),” the regulator stated.
• “Accordingly, all transactions in the affected securities shall be deemed fully paid at the time of settlement to ensure maintenance of the standard settlement procedure of Delivery versus Payment (DvP).”

The Commission added that where a broker-dealer’s trading account is insufficiently funded to meet its settlement obligations by the prescribed deadline, the default will be managed in line with the CSCS Default Management Procedure and the settlement guidelines of the relevant exchange.

Foreign investors exempt from pre-funding

The SEC also clarified that foreign portfolio investors are not required to pre-fund their accounts before executing trades in the Nigerian capital market.

However, capital market operators facilitating transactions for foreign investors are required to establish and maintain appropriate controls to ensure that funds are available for settlement within the prescribed timeframe.

• “For the avoidance of doubt, foreign portfolio investors are not required to pre-fund their accounts for trades in the Nigerian Capital Market,” the Commission said.

The regulator said the transition to T+1 is expected to improve settlement efficiency, reduce counterparty risk, enhance liquidity and strengthen the competitiveness of the Nigerian capital market.

• “The implementation of the T+1 settlement cycle represents a significant milestone in improving settlement efficiency, reducing counterparty risk, enhancing liquidity, and strengthening the competitiveness of the Nigerian capital market,” it said.

Get up to speed

The clarification follows the launch of Nigeria’s T+1 settlement cycle by the Central Securities Clearing System (CSCS) Plc in June, completing the market’s transition from the previous two-day settlement framework.

• Under T+1, securities transactions executed on a trading day are settled on the following business day, shortening the period between trade execution and final settlement.
• The SEC had earlier issued a framework requiring capital market operators and other stakeholders to align their systems and operations with the new settlement cycle.

The transition is expected to reduce counterparty exposure by shortening the period during which a party to a transaction could default before settlement.

It also reduces the volume of unsettled trades outstanding in the market at any given time.

What you should know

Nigeria’s settlement cycle reform has progressed from T+3 to T+2 and now T+1, representing a rapid overhaul of the country’s post-trade infrastructure.

The SEC had said the reform is part of efforts to create a more efficient, resilient and internationally aligned capital market while improving Nigeria’s attractiveness to domestic and foreign investors.

The Commission had directed market operators to review their systems and operational processes ahead of the implementation to ensure a smooth transition.

The latest clarification provides market participants with a specific settlement deadline and further defines the obligations of brokers and other capital market operators under the T+1 framework.