Nigeria to Transition to T+1 Settlement Cycle for Capital Markets
Nigeria’s capital markets are set to adopt a T+1 settlement cycle for equity and commodity transactions starting June 1, 2026. This significant shift aims to modernize market operations, enhance efficiency, and align the country’s practices with global standards.
SEC Issues Implementation Guidelines
The Securities and Exchange Commission (SEC) released a notice detailing the framework and guidelines for this transition on Tuesday. This initiative underscores the ongoing reform efforts within Nigeria’s capital markets.
Details of the New Settlement Regime
Under the forthcoming T+1 system, eligible transactions in the Nigerian capital market will be settled one business day following the trade date, replacing the existing T+2 cycle, which requires two business days for settlement.
Objectives of the Modernization Efforts
The SEC emphasized that this transition is integral to improving market efficiency, enhancing risk management, and reducing counterparty exposure. The shift will also serve to boost liquidity and align Nigeria’s capital markets with international best practices.
Last Trading Day Under T+2 Framework Confirmed
According to the SEC, Friday, May 29, 2026, will mark the final trading day under the current T+2 framework. To facilitate the transition, trades executed on both May 29 and June 1 will settle on June 2, 2026.
Preparedness for Market Participants
The SEC has urged all market participants—including capital market operators, stock exchanges, and custodians—to ensure they are operationally prepared by the transition date. All trades executed after June 1 will automatically adhere to the T+1 settlement structure.
Global Context and Expected Benefits
This move aligns Nigeria with other nations that have implemented quicker securities settlement systems. For instance, the United States transitioned to T+1 settlements in May 2024, while Canada and Mexico have adopted similar frameworks. India is also exploring faster payment cycles and testing instant payments for certain transactions. The expected advantages of this new system include improved liquidity and reduced risks associated with settlement delays. Retail investors should anticipate quicker access to proceeds from share sales, while institutional investors and custodians may need to enhance their infrastructure to adapt effectively to the new requirements.
