The Securities and Exchange Commission (SEC) has fixed 5:00 p.m. on the first business day after a transaction (T+1) as the settlement deadline for equities and commodities traded and settled through the Central Securities Clearing System (CSCS).
The Commission announced the clarification in a circular issued on Wednesday to capital market operators and other market participants as part of measures to implement the T+1 settlement cycle in the Nigerian capital market.
Under the new arrangement, all transactions involving the affected securities must be fully paid by 5:00 p.m. on T+1 to ensure compliance with the standard Delivery versus Payment (DvP) settlement procedure.
The SEC warned that where a broker/dealer’s trading account is not adequately funded to meet its settlement obligations within the prescribed period, the default will be managed in accordance with the CSCS Default Management Procedure and applicable settlement guidelines of the relevant exchange.
The Commission also clarified that foreign portfolio investors are not required to prefund their accounts for trades in the Nigerian capital market.
However, capital market operators facilitating transactions for foreign portfolio investors are required to establish and maintain appropriate controls and processes to ensure timely funding and completion of settlements within the prescribed timeframe.
The clarification follows the SEC’s earlier circulars on the implementation of the T+2 settlement cycle for equities transactions issued on June 3, 2025, and the transition to T+1 settlement issued on May 15, 2026.
The T+1 cycle means eligible securities transactions are settled one business day after the trade date, thereby reducing the period between execution and final settlement.
The SEC said the transition marks a significant milestone in its efforts to create a more efficient, resilient and internationally aligned trading and post-trade environment.
According to the Commission, the shorter settlement cycle is expected to improve settlement efficiency, reduce counterparty risk, enhance liquidity and strengthen the competitiveness of the Nigerian capital market.
It added that the reforms would ultimately make the Nigerian market more attractive to both domestic and international investors.
