Nigeria’s capital market regulator, the Securities and Exchange Commission, has issued fresh guidance ahead of the planned transition to a T+1 settlement cycle for equities and commodities transactions, set to commence on June 1, 2026.
The directive, published by the Commission on Monday, outlines the framework that capital market operators and stakeholders must comply with before the implementation date.
The reform forms part of the SEC’s broader strategy to modernize Nigeria’s financial markets, improve liquidity, and align local trading infrastructure with global standards.
Under the new framework, eligible trades executed in the Nigerian capital market will now settle one business day after the transaction date, replacing the current T+2 settlement structure where trades settle after two business days.
According to the SEC, May 29, 2026, will serve as the final trading day under the T+2 cycle, while trades executed on both May 29 and June 1 will settle simultaneously on June 2, 2026.
The convergence arrangement is intended to ensure a smooth transition into the new settlement regime.
The Commission also directed all market participants — including securities exchanges, clearing and settlement infrastructure providers, custodians, registrars, issuers, and brokers — to achieve full operational readiness before the June 1 commencement date.
Move Expected to Reduce Settlement Risk
Industry analysts say the migration to T+1 is expected to significantly reduce counterparty risk by shortening the period between trade execution and settlement.
The shorter settlement cycle will also improve capital efficiency across the market, enabling brokers, institutional investors, and custodians to access cash and securities faster for reinvestment opportunities.
The reform places Nigeria alongside major global markets already adopting faster settlement systems. The United States transitioned to T+1 settlement in 2024, while countries such as Canada and Mexico have also embraced similar models. India has gone even further by piloting near-instant settlement systems for selected trades.
Market Operators Urged to Upgrade Systems
The SEC emphasized that firms operating in the capital market must urgently review and recalibrate their back-office systems, reconciliation workflows, and settlement processes ahead of the transition.
Stakeholders that fail to meet operational requirements by the implementation date could face settlement failures and possible regulatory sanctions.
Nigeria’s transition to T+1 follows a rapid evolution in settlement reforms, with the market moving from T+3 to T+2 and now to T+1 within a relatively short period.
For retail investors, the new framework means proceeds from stock sales will become available sooner, potentially improving market participation and liquidity.
