By Seun Ibiyemi
The Securities and Exchange Commission (SEC) has fixed 5:00 p.m. on the first business day after a trade (T+1) as the settlement deadline for equities and commodities transactions cleared through the Central Securities Clearing System (CSCS).
The commission announced the clarification in a circular issued on Wednesday, aimed at providing greater certainty on the implementation of Nigeria’s one-day settlement cycle in the capital market.
According to the SEC, all equities and commodities transactions settled through the CSCS must be completed by 5:00 p.m. on T+1, with transactions required to be fully funded at settlement.
The regulator said the requirement is intended to preserve the standard Delivery versus Payment (DvP) settlement mechanism, under which securities are delivered only against corresponding payment.
The SEC warned that where a broker-dealer’s trading account is insufficiently funded to meet its settlement obligations by the prescribed deadline, the default will be handled in accordance with the CSCS Default Management Procedure and the relevant settlement guidelines of the Exchange.
FPIs Exempted From Prefunding
The commission also clarified that foreign portfolio investors (FPIs) are not required to prefund their accounts before executing trades in the Nigerian capital market.
However, the SEC said capital market operators facilitating transactions for FPIs must maintain adequate controls and processes to ensure that funding and settlement obligations are completed within the T+1 deadline.
The latest circular updates the SEC’s previous directives on settlement cycles, including the June 3, 2025 circular on T+2 and the May 15, 2026 circular on the transition to T+1.
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Nigeria transitioned to the T+1 settlement cycle in June 2026, following its earlier move from T+3 to T+2 in November 2025.
The shorter settlement cycle is expected to reduce counterparty and settlement risks, improve market efficiency and enhance the attractiveness of Nigeria’s capital market to both domestic and international investors.
SEC Director-General, Emomotimi Agama, had previously said Nigeria’s adoption of T+1 placed the country among markets accounting for about 60 per cent of global market capitalisation that have implemented the shorter settlement cycle.
The commission has also commenced preparations towards a possible T+0 settlement cycle, which would allow eligible transactions to be settled on the same day they are executed.