SEC fixes 5pm deadline for T+1 settlement
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has announced that all payments for shares and commodities traded on the Nigerian stock market must now be completed by 5:00 p.m. the next business day after a trade is made.
This new rule is part of the recently adopted T+1 settlement system, which means “Trade Day Plus One Day.”
In a circular sent to stockbrokers, dealers, and other players in the capital market on Wednesday, the Commission explained that the deadline applies to all transactions processed through the Central Securities Clearing System, known as CSCS. It said the new timeline is meant to support what is called Delivery versus Payment, a process where shares only change hands once payment has been confirmed.
A source close to the Commission, speaking on the new guidelines, said the rule is designed to protect the integrity of the market. “Every naira owed for a trade must be in place before the close of business the next day. This is not something operators can treat lightly,” the source said.
The SEC also gave a strong warning to brokers and dealers. It said that if a trading account does not have enough money to settle a transaction within the given time, such a case will be treated as a default. This means the matter will be handled according to the CSCS Default Management Procedure and other rules guiding the exchange where the trade took place.
For foreign investors who bring money into the Nigerian market, the Commission clarified that they are not required to fund their accounts in advance before trading. However, it placed responsibility on capital market operators who handle transactions for these foreign investors, directing them to put proper systems in place to make sure payments are made on time and settlements are completed as required.
This latest circular builds on earlier directives from the SEC. The Commission had first introduced the T+2 settlement cycle, where trades were settled two days after execution, through a circular issued on June 3, 2025. It later moved to shorten this further to T+1 through another circular dated May 15, 2026.
Explaining the essence of the T+1 model, the SEC noted that it simply means a transaction is completed and finalised just one business day after it is carried out, cutting down the waiting time between buying or selling shares and the actual transfer of money and shares.
The Commission described the shift to T+1 as a major step forward for Nigeria’s capital market. According to the SEC, “This move brings our market closer in line with global standards and shows our commitment to building a trading system that investors, both at home and abroad, can trust.”
The Commission further explained that a faster settlement cycle would help reduce the risks that come with delayed payments, free up cash for investors more quickly, and make the Nigerian market more appealing to both local and foreign investors looking for a fast and reliable place to do business.
