SEC Unveils Framework for T+1 Settlement Transition

Nigeria’s Securities and Exchange Commission has issued operational guidance ahead of the transition to a T+1 settlement cycle for equities and commodities transactions in the Nigerian capital market.

The new framework will take effect from Monday, June 1, 2026.

The directive was contained in a notice issued by SEC management and published on Monday, May 18, 2026, outlining implementation procedures and timelines for market operators and stakeholders.

According to the commission, the transition forms part of its broader market modernisation programme aimed at improving liquidity, enhancing operational efficiency, and aligning Nigeria’s capital market with global standards.

Under the T+1 settlement model, all eligible trades executed in the Nigerian market will settle one business day after the trade date, replacing the current T+2 settlement cycle.

SEC disclosed that May 29, 2026, would serve as the final trading day under the existing T+2 framework.

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The commission further stated that trades executed on May 29 and June 1 would settle on the same date, Tuesday, June 2, 2026, creating a temporary convergence window to ensure a smooth transition process.

“All trades executed from June 1 onward will be governed by the T+1 framework,” the commission stated.

The regulator directed all capital market operators, securities exchanges, clearing houses, custodians, registrars, issuers, and other relevant stakeholders to attain full operational readiness before the implementation date.

According to SEC, the move is expected to reduce counterparty exposure within the financial system by shortening the period between trade execution and settlement.

The commission explained that reducing the settlement window from two business days to one would lower the volume of unsettled transactions within the market at any given time.

The regulator also stated that the shorter cycle would improve capital efficiency for brokers, custodians, and institutional investors by enabling earlier access to cash and securities for reinvestment purposes.

SEC noted that the transition aligns Nigeria with ongoing global market reforms.

The commission referenced developments in other jurisdictions, including the migration of the United States to T+1 settlement in May 2024, alongside similar transitions by Canada and Mexico.

It also noted that India had progressively compressed its settlement cycle and was already piloting instantaneous settlement for selected trades.

According to the commission, the transition signals Nigeria’s commitment to strengthening market competitiveness and improving operational standards within the capital market ecosystem.

The regulator added that market participants were expected to review internal processes, technology systems, and operational structures to ensure compliance with the new framework before commencement.