SEC Sets 5 P.m. T+1 Settlement Deadline

The Securities and Exchange Commission (SEC) has fixed 5:00 p.m. on the first business day after trading as the settlement deadline for eligible equities and commodities.

The Commission confirmed the directive in a circular issued on Wednesday to capital market operators and other market participants nationwide.

SEC said the measure formed part of the implementation of the T+1 settlement cycle in Nigeria’s capital market.

Under the T+1 framework, eligible securities transactions are settled one business day after the trade date, shortening the settlement period.

According to the Commission, all affected transactions must be fully funded by 5:00 p.m. on T+1.

It said the requirement would ensure compliance with the standard Delivery versus Payment (DvP) settlement procedure used in the market.

“Accordingly, all transactions in the affected securities must be fully paid by 5:00 p.m. T+1,” the Commission stated.

SEC warned that any broker or dealer whose trading account lacked sufficient funds to meet settlement obligations would face default procedures.

It said such defaults would be managed in accordance with the Central Securities Clearing System (CSCS) Default Management Procedure.

The Commission also clarified that foreign portfolio investors would not be required to prefund accounts before executing trades in Nigeria’s capital market.

However, it directed capital market operators acting for foreign investors to maintain effective controls for timely funding and settlement completion.

The News Agency of Nigeria (NAN) reports that operators must establish and maintain processes that ensure transactions are settled within the prescribed timeframe.

The Commission described the transition to T+1 settlement as a major step towards strengthening market infrastructure and operational efficiency.

It said the initiative would support a more resilient and internationally aligned trading and post-trade environment.

SEC added that the shorter settlement cycle would improve settlement efficiency and reduce counterparty risks across the market.

The Commission said the reform would also enhance liquidity and strengthen the competitiveness of Nigeria’s capital market globally.

Source: News Agency of Nigeria (NAN)