SEC Sets 5pm T+1 Settlement Deadline for Nigerian Market

The Securities and Exchange Commission (SEC) has established a settlement deadline of 5:00 p.m. on the first business day after a transaction (T+1) for equities and commodities traded through the Central Securities Clearing System (CSCS). This decision was communicated in a circular issued on Wednesday to capital market operators and other participants, marking the implementation of the T+1 settlement cycle in Nigeria's capital market.

All transactions in the specified securities must be fully paid by the deadline to comply with the Delivery versus Payment (DvP) settlement procedure. The SEC warned that if a broker/dealer's trading account lacks sufficient funds for settlement, the default will be managed according to the CSCS Default Management Procedure.

Foreign portfolio investors are not required to prefund their accounts; however, capital market operators must ensure timely funding for settlements. This transition follows previous SEC circulars regarding the T+2 settlement cycle and aims to improve efficiency, reduce counterparty risk, and enhance the competitiveness of the Nigerian capital market.