T+1: Nigeria aligns with global standards, eyes liquidity boost

Nigeria’s capital market is approaching a critical inflection point as stakeholders race to align systems, processes, and risk frameworks ahead of the planned transition to a T+1 settlement cycle, a move that promises faster trade completion but is also testing the operational readiness of the entire ecosystem.

The shift, scheduled to take effect on May 29, 2026, will compress the settlement window for equities transactions from two days to just one, marking the next phase in a reform journey that saw the market migrate from T+3 to T+2 only months ago.

At the centre of the transition is the Central Securities Clearing System Plc (CSCS), which has described the reform as a structural upgrade designed to “enhance post-trade efficiency” and reduce settlement risk across the market.

But beyond the promise of speed and efficiency lies a deeper question: are Nigeria’s capital market stakeholders truly ready for the tighter settlement cycle?

The Securities and Exchange Commission (SEC), which oversees the market, has consistently framed shorter settlement cycles as a cornerstone of globally competitive markets. The Director-General previously noted that such reforms “align our market with international best practices” while enhancing investor confidence and reducing systemic risks.

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At the exchange level, the Nigerian Exchange Group (NGX) has ramped up coordination with dealing members, custodians, and registrars, focusing on system upgrades and operational synchronisation. Market infrastructure providers say extensive simulations and joint testing exercises have been conducted in recent months to ensure a seamless migration.

For the CSCS, which handles clearing and settlement, preparedness has been anchored on phased implementation — testing in March, industry-wide simulations in April, and final risk reviews ahead of go-live.

“We are entering the next phase in the evolution of our market infrastructure,” the clearing house said in its notice to stakeholders, underscoring the scale of the transition.

The Managing Director and Chief Executive Officer of CSCS, Dr Yahaya Shantali, emphasised the importance of keeping up with global changes and the role of the regulator in ensuring market efficiency, while noting that the clearing house is ready for the transition, having upgraded its system in readiness for T+1 settlement months ago, while preparing for T+2 settlement.

However, operators across the value chain paint a more nuanced picture.

According to stockbrokers, while top-tier firms have largely upgraded their systems to support faster trade confirmation and funding timelines, smaller dealing members are still adjusting to the compressed cycle. “T+1 leaves very little room for manual intervention,” one Lagos-based broker said. “Everything, from trade matching to funding, has to be almost instantaneous.”

“In reality, T+1 is the catalyst that unlocks progress across multiple dimensions simultaneously. It pushes markets toward automation, demands faster decision-making, and encourages investment in infrastructure. It aligns local markets with global standards and signals readiness for deeper integration into the international financial system. In the end, T+1 is not the problem. It is the pressure the system has been missing and the push the market needs to finally move forward,” said Sola Oni, Chief Executive Officer of Sofunix Investment and Communications.

Custodians and settlement banks are also recalibrating processes, particularly around funding timelines and cross-border transactions, where foreign investors must align with tighter cut-off times.

Shareholders, meanwhile, have expressed cautious optimism. Retail investor groups noted that the reform could improve liquidity and reduce waiting times for proceeds, but warned that any system glitches could undermine confidence. “Speed is good, but reliability is more important,” said Adebayo Aderemi.

Analysts note that the success of the transition will depend less on regulation and more on execution discipline across the ecosystem. The move to T+1 requires real-time coordination between brokers, custodians, registrars, and clearing systems, an operational shift that leaves little tolerance for delays or errors.

Still, the broader consensus is that Nigeria has little choice but to move forward. With major global markets already operating on T+1, and others planning similar transitions, the reform is seen as essential to maintaining competitiveness and attracting foreign capital.

If successfully implemented, the transition could unlock faster capital recycling, deepen market liquidity, and position Nigeria as one of the most advanced settlement markets in Africa. But in the weeks leading up to the switch, the focus remains firmly on readiness.