The Nigerian capital market has taken a significant step towards development with the introduction of a T+1 settlement cycle, effective June 1, 2026. This move, led by the Central Securities Clearing Systems (CSCS) Plc in collaboration with regulators and market operators, aims to make the market more attractive and enhance its role in wealth creation and economic development. The T+1 settlement cycle reduces the standard settlement period from two business days to one, allowing for more efficient transactions.
The Nigerian capital market has long been recognized for its vast potential, given the country's large population and economic activities. However, the market's growth has been hindered by weak infrastructure, institutional depth, macroeconomic instability, and low investor participation. The introduction of the T+1 settlement cycle is expected to address some of these challenges and improve market activities. With this development, Nigeria's capital market is now ahead of many global markets in terms of settlement efficiency.
The implementation of the T+1 settlement cycle follows a successful transition to a T+2 settlement cycle on November 28, 2025. The new cycle allows eligible trades to settle at 5:00 p.m. on T+1, with transactions treated as fully paid at settlement in accordance with the Delivery-versus-Payment (DVP) principle. The regulatory framework also clarifies that foreign portfolio investors are not required to prefund their accounts, although their appointed operators must maintain controls to ensure that funding and settlement obligations are completed before settlement.
The CSCS played a crucial role in the development and implementation of the market-wide transition plan, working closely with the Securities and Exchange Commission (SEC), exchanges, trade associations, custodians, settlement banks, broker-dealers, and other market operators. The transition involved stakeholder consultations, market sensitization, operational-readiness assessments, system upgrades, end-to-end testing, and industry webinars. These efforts aimed to align participants and ensure a smooth transition to the new settlement cycle.
To ensure a successful implementation, the CSCS also hosted engagement webinars with exchanges and trade associations to strengthen industry preparedness and coordinate market-wide implementation. Additionally, the CSCS engaged with international institutions and market participants to address concerns about the impact of T+1 on foreign institutional investors. Discussions with the SEC, FTSE Russell, global custodians, and institutional investors helped clarify the market's settlement and funding arrangements.
The introduction of the T+1 settlement cycle is expected to boost confidence in the Nigerian capital market and lead to improved market activities. With this development, the market is now more attractive to investors, and its potential for wealth creation and economic development can be fully realized. The CSCS's efforts to transform the market infrastructure have been instrumental in achieving this milestone, and its collaboration with market stakeholders has been critical to the success of the T+1 programme.
The successful implementation of the T+1 settlement cycle is a significant milestone in the development of Nigeria's capital market. The market's growth and efficiency will depend on continued collaboration between market stakeholders and regulators. With the T+1 settlement cycle in place, the Nigerian capital market is poised for growth and is expected to play a more significant role in the country's economic development.
Key points
- - The introduction of the T+1 settlement cycle aims to boost efficiency and attract investors to Nigeria's capital market. - The Central Securities Clearing Systems (CSCS) Plc led the development and implementation of the market-wide transition plan. - The T+1 settlement cycle reduces the standard settlement period from two business days to one, allowing for more efficient transactions.
