By Boluwatife Oshadiya | August 13, 2026
Key Points
- SEC requires eligible equities and commodities transactions to be fully settled by 5:00 p.m. on T+1
- Brokers and dealers without sufficient funds will be subject to CSCS default management procedures
- Foreign portfolio investors are exempt from mandatory prefunding but their operators must ensure timely settlement
Main Story
The Securities and Exchange Commission (SEC) has fixed 5:00 p.m. on the first business day after trading as the settlement deadline for eligible equities and commodities transactions under Nigeria’s T+1 framework.
The Commission disclosed the requirement in a circular issued to capital market operators and other market participants, directing that all affected transactions must be fully funded by the 5:00 p.m. T+1 deadline.
Nigeria commenced its transition from T+2 to T+1 settlement for eligible equities and commodities transactions on June 1, 2026, as part of the SEC’s market modernisation programme. The regulator said the shorter cycle is intended to improve market efficiency, reduce counterparty exposure, strengthen liquidity and align Nigeria with international settlement standards.
Under the new requirement, transactions must comply with the delivery-versus-payment (DvP) settlement process, which requires the delivery of securities and corresponding payment to be completed within the prescribed settlement framework.
“Accordingly, all transactions in the affected securities must be fully paid by 5:00 p.m. T+1,” the Securities and Exchange Commission said.
The SEC warned that brokers or dealers whose trading accounts lack sufficient funds to meet settlement obligations would be treated as defaulters under the Central Securities Clearing System (CSCS) Default Management Procedure.
The Commission also clarified that foreign portfolio investors would not be required to prefund their accounts before executing trades in Nigeria. However, capital market operators acting for such investors must maintain effective controls to ensure that funds are available and settlement obligations are completed within the prescribed timeframe.
The directive places greater emphasis on operational readiness among brokers, custodians, settlement banks and other market participants as the market adjusts to the shorter settlement window.
What’s Being Said
“The Commission’s priority is to ensure strict delivery-versus-payment discipline across brokers, custodians, settlement banks, and the Central Securities Clearing System (CSCS) Plc as the market adapts to the shortened settlement cycle,” said Emomotimi Agama, Director-General, Securities and Exchange Commission.
Market analysts have previously linked the early adjustment period under T+1 to changes in trading activity, with some experts saying foreign investors were initially staying on the sidelines while assessing the operational impact of the new framework.
What’s Next
- Capital market operators are expected to maintain systems and controls capable of meeting the 5:00 p.m. T+1 settlement deadline
- The SEC is targeting a sustained near-zero trade-failure rate during the second half of 2026.
- FTSE Russell is expected to provide an update by the end of August 2026 on Nigeria’s planned reclassification, following its assessment of the impact of T+1 on international investors.
The Bottom Line:
The 5:00 p.m. deadline turns Nigeria’s T+1 reform from a broad settlement-cycle change into a tighter operational requirement for market participants. Its success will depend on whether brokers, custodians and settlement institutions can consistently meet the compressed funding window without creating avoidable settlement failures or barriers for international investors.
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