SEC: T+1 settlement cycle has strengthened Nigerian stock market

The Securities and Exchange Commission (SEC) says Nigeria's transition to a T+1 settlement cycle has enhanced the competitiveness and depth of the capital market, with no default recorded so far. SEC Director General, Dr Emomotimi Agama, said the adoption has been smooth and effective, raising the profile of the Nigerian market globally.

Investors happy with T+1

Agama, represented by SEC's Director for Registration, Exchanges and Market Infrastructure, Mrs Hafsat Rufai, said both local and international investors have expressed satisfaction with the new cycle. He said: “Feedback from them has been excellent. They are happy with T+1, and the local investors are also happy with T+1. The fear initially was around the availability of cash to settle, time zone being one of the major considerations.”

He explained that investors were concerned about sourcing funds for settlement when Nigeria's market closes at 4:00 p.m. while it is midnight in some countries. But the 5:00 p.m. settlement deadline gives custodian banks enough time to source funds. “Knowing that it is not at 8:00 a.m., it is 5:00 p.m., I think that gives enough time for the custodian banks, who are representatives of those investors, to source the funds required and settle the securities and cash as well, because it's a DVP market. It's delivery versus payment,” he said.

Timeline of the transition

The Nigerian capital market operated on a T+3 settlement cycle for several years before beginning a phased transition. The market moved from T+3 to T+2 on November 28, 2025, before migrating to T+1 on June 1, 2026.

Agama explained: “Transaction day or the trade day when your shares are bought or sold on a particular day, that is day T, and then plus one, which is the current settlement cycle, means that when you buy your shares, say for instance you buy today, being a Monday, the shares will settle in your account by 5:00 p.m. tomorrow.”

He noted that the reduction in the settlement cycle was aimed at making the Nigerian market more efficient by allowing investors to receive their securities or cash sooner. Under the old T+2 system, settlement occurred at 8:00 a.m. two days after the trade. The SEC shortened this to T+1 and moved the settlement deadline from 8:00 a.m. to 5:00 p.m. after trading hours on the Nigerian Exchange were extended from 2:30 p.m. to 4:00 p.m.

“If you recall, we extended trading hours earlier this year from 2:30 to 4:00 p.m. at the NGX, and then we thought, if market closes at 4:00 and we ask people to settle, that is, to provide cash and securities, at 8:00 a.m. the next day, that kind of close to being T+0 is almost as good as just telling me to pay today, and we don't want that strain,” Agama said.

What this means for investors

The faster settlement cycle means Nigerian investors get their securities or cash sooner, reducing settlement risk and improving market efficiency. With no defaults recorded so far, the SEC says the new system is already delivering benefits for local and international participants in the Nigerian capital market.