The Securities and Exchange Commission (SEC) has issued guidance for the transition to a T+1 settlement cycle for equities and commodities transactions, effective June 1, 2026.
The directive, published on May 18, requires all capital market operators to achieve full operational readiness ahead of the deadline.
All eligible trades executed from June 1 onward will settle one business day after the trade date, replacing the existing two-business-day window.
May 29, 2026, will be the final trading day under the current T+2 cycle, with trades executed on both May 29 and June 1 settling on Tuesday, June 2, creating a brief convergence window.
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The shift reduces counterparty exposure by compressing the settlement window from two days to one, lowering the risk of default between trade execution and settlement.
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A shorter cycle also improves capital efficiency, as brokers, custodians, and institutional investors will have cash and securities freed up a full day earlier.
The move aligns Nigeria with developed markets such as the United States, Canada, and Mexico, which migrated to T+1 in May 2024.
India has also progressively compressed its settlement cycle and is piloting instantaneous settlement for select trades.
For retail investors, proceeds from share sales will be available sooner, while back-office systems calibrated for T+2 must be urgently reconfigured.
The SEC has directed all operators to review and align their systems before implementation, warning that participants not operationally ready by June 1 risk settlement failures and regulatory consequences.
The pace of reform reflects Nigeria’s determination to close infrastructure gaps and attract foreign institutional investors.
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