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