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The Securities and Exchange Commission (SEC) has set 5:00 p.m. on the first business day after a trade (T+1) as the settlement deadline for eligible equities and commodities transactions processed through the Central Securities Clearing System (CSCS).
The Commission disclosed this in a circular issued to capital market operators and other market participants on Wednesday as part of efforts to clarify the implementation of the T+1 settlement cycle in Nigeria’s capital market.
Under the new requirement, all affected transactions must be fully funded by 5:00 p.m. on T+1 to comply with the standard Delivery versus Payment (DvP) settlement process.
The SEC warned that where a broker or dealer does not have sufficient funds in its trading account to meet its settlement obligations within the prescribed period, the default will be handled in accordance with the CSCS Default Management Procedure and the applicable settlement rules of the relevant exchange.
Foreign investors not required to prefund
The regulator also clarified that foreign portfolio investors (FPIs) are not required to prefund their accounts before executing trades in Nigeria’s capital market.
However, capital market operators acting on behalf of foreign investors are required to establish appropriate controls and processes to ensure that trades are funded and settled within the stipulated timeframe.
The clarification follows earlier SEC directives on settlement-cycle reforms, including the circular issued on June 3, 2025, relating to the implementation of the T+2 settlement cycle for equities, and another issued on May 15, 2026, announcing the transition to T+1.
Nigeria moves towards faster settlement
Under the T+1 framework, eligible securities transactions are completed one business day after the trade date, reducing the time between execution and final settlement.
The SEC said the transition represents a major step towards creating a more efficient, resilient and internationally aligned trading and post-trade environment.
A shorter settlement cycle is expected to reduce counterparty exposure by limiting the period during which market participants remain exposed to settlement risk.
The reform could also improve settlement efficiency, enhance liquidity and strengthen the overall competitiveness of Nigeria’s capital market.
According to the Commission, aligning Nigeria’s settlement infrastructure with international standards should ultimately make the market more attractive to both domestic and foreign investors.
The latest clarification therefore provides market participants with a specific settlement cut-off while reinforcing the SEC’s broader push for greater efficiency, risk management and regulatory compliance across Nigeria’s capital market.
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