The Securities and Exchange Commission (SEC) has fixed 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, providing further clarity on the implementation of the shortened settlement cycle.
The Commission disclosed this in a public notice signed by its management on August 12, 2026, building on its earlier circulars of June 3, 2025, which established the T+2 settlement framework, and May 15, 2026, which set out the transition to T+1.
Under the latest directive, all equities and commodities transactions settled through the Central Securities Clearing System (CSCS) will be deemed fully paid at the point of settlement, in line 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.
It added that transactions in the affected securities would be deemed fully paid at settlement to ensure compliance with the standard DvP settlement procedure.
The SEC also clarified how settlement obligations will be handled where a broker-dealer does not have sufficient funds in its trading account.
Where an account is inadequately funded to meet settlement obligations by the 5:00 p.m. deadline, the resulting default will be managed under the CSCS Default Management Procedure and the settlement guidelines of the relevant exchange.
In a significant clarification for international participants, the SEC said foreign portfolio investors (FPIs) are not required to pre-fund their accounts before executing trades in Nigeria’s capital market.
However, capital market operators facilitating FPI transactions must establish and maintain appropriate controls to ensure that the necessary 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 position is expected to provide greater clarity for foreign investors and their intermediaries as the market operates under the shorter settlement cycle.
T+1 tightens Nigeria’s settlement framework
The T+1 regime means that securities transactions executed on a trading day are settled on the following business day, reducing the interval between trade execution and final settlement.
The CSCS launched Nigeria’s T+1 settlement cycle in June, completing the market’s transition from the previous T+2 framework.
The development is designed to reduce the amount of time during which counterparties remain exposed to settlement risk. By shortening the settlement window, the framework also reduces counterparty exposure and the volume of unsettled trades outstanding in the market at any given time.
The SEC said the transition is expected to improve settlement efficiency, reduce counterparty risk, enhance market 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,” the Commission said.
