Goddy Egene writes on the role of the Central Securities Clearing Systems Plc in the transition to T+1 settlement cycle in that is capable of making the Nigeria’s capital market more attractive and play its role of wealth creation and economic development
That Nigeria’s capital market has very huge potential is not in doubt. Given the large population and economic activities, the nation’s capital market ought to be very deep and robust. But the market’s potential remains largely untapped due to many factors. These include: weak infrastructure and institutional depth, macroeconomic instability; low investor participation among others.
However, some level of improvement will be witnessed in the market going forward as of the critical factors, which is weak market infrastructure, has been addressed.
Led by the Central Securities Clearing Systems (CSCS) Plc and in collaboration with regulators, operators and other stakeholders, the market infrastructure has been transformed culminating in the T+1 settlement cycle on June 1, 2026.
This reform followed the successful introduction of a T+2 settlement cycle on 28 November 2025.
The T+1 has reduced the standard settlement period from two business days after the trade date to one business day.
Following the implementation, eligible trades now 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.
With the attainment of T+1 settlement the Nigeria’s capital market is ahead of many global markets in terms and this is expected to boost confidence and lead to improved market activities.
Collaboration with Market Stakeholders
Working with the Securities and Exchange Commission (SEC), exchanges, trade associations, custodians, settlement banks, broker-dealers and other market operators, CSCS supported the development and implementation of the market-wide transition plan. Preparatory activities included stakeholder consultations, market sensitisation, operational-readiness assessments, system upgrades, end-to-end testing and industry webinars designed to align participants ahead of implementation.
For the T+1 programme, this collaboration covered rule alignment, operational-readinessassessments, gap analysis, systems changes, market-wide testing, investor education and implementation monitoring. CSCS also hosted engagement webinars with exchanges and trade associations to strengthen industry preparedness and coordinate market-wide implementation.
Similarly, engagement with international institutions and market participants became especially important following questions about how T+1 would affect foreign institutional investors.
Discussions involving the Securities and Exchange Commission (SEC), FTSE Russell, global custodians and institutional investors helped clarify the market’s settlement and funding arrangements.
These engagements supported market development by: creating common understanding of new settlement requirements, identifying and resolving operational issues before and after implementation; ensuring that market reforms considered the needs of both local and international participants; promoting consistent communication across the ecosystem; providing international investors with evidence of Nigeria’s operational readiness; reinforcing collective ownership of market reforms.
CSCS Management Comments on Transition
Commenting on this development, Managing Director/CEO of CSCS Plc, Mr. Shehu Yahaya Shantali, said: “Moving from T+3 to T+1 was not simply about taking two days out of the settlement cycle.
It required us to rethink the infrastructure, processes and operational capacity supporting the market and ensure that they could perform effectively within a much shorter window. For CSCS, that meant strengthening the technology and resilience behind settlement while ensuring that speed did not come at the expense of reliability.”
Shantali added: “ What T+1 has ultimately delivered is a market infrastructure that can move transactions through the post-trade cycle faster, reduce the period for which capital is tied up in unsettled transactions and create a stronger foundation for a more efficient and globally competitive Nigerian capital market. More importantly, it demonstrates our capacity to continually evolve the infrastructure as the needs and sophistication of the market change.”
Also speaking, Divisional Head, Business Services and Client Experience at CSCS Plc, Onome Komolafe, said: “The transition to T+1 has fundamentally changed the operating dynamics of the market, raising expectations for timeliness, accuracy, responsiveness, and coordination across the settlement process. With a shorter settlement window, there is less room for delays, making operational readiness more critical than ever. Our focus was on ensuring that market participants understood the implications of T+1 for their operations. Through targeted engagements with key stakeholders, we identified potential friction points, addressed operational concerns, and strengthened the support required for a seamless transition.”
“Since the transition, T+1 has demonstrated that faster settlement is only part of the story. It has strengthened operational discipline, improved coordination across the market and highlighted opportunities to simplify processes, improve turnaround times and reduce operational bottlenecks. Ultimately, the transition has contributed to a more responsive and efficient market environment, while reinforcing our commitment to continuous improvement and seamless service delivery as the market evolves,” she added.
Benefits of Shorter Settlement Cycle
The shorter settlement cycle has delivered important structural benefits. For instance, transactions volume, value and deals have witnessed significant increase in the last three months. A total of N2.742 trillion transactions were done in 3,375,977 deals in the months of June, July and August. Also, the number of accounts created has increased following the transition to T+1.
Accounts created in 2025 were 1,114,93 to bring the total accounts to 15,594,378 as at the end of that year. However, 1,895,412 accounts have been created to bring the total accounts to 17,311,720 till date this year.
The major benefit to investors is that they receive purchased securities or sale proceeds one business day after execution.
Other benefits of the new order is that market’s exposure to counterparty and settlement risk is reduced because obligations remain outstanding for a shorter period.
Also, capital is released more quickly for reinvestment, supporting liquidity and more efficient use of funds.
Equally, market operators have been encouraged to improve automation, reconciliation and exception-management processes.
Similarly, Nigeria’s post-trade framework is more closely aligned with the direction of leading international securities markets.
Equally important is the fact that successful operation of T+1 addressed concerns raised by international market participants regarding funding and settlement. Following further assessment, FTSE Russell reported that no material settlement, operational or funding issues had been observed since implementation, supporting the return of Nigeria’s market to Frontier Market status.
The move to T+1 has also improved the investor experience by enabling quicker access to securities and sale proceeds. For domestic investors, this supports faster reinvestment and more efficient cash management. For international investors, a predictable settlement timetable, clear funding requirements and robust custody arrangements are important components of market accessibility. The clarification that foreign portfolio investors are not required to prefund their accounts is particularly relevant to international participation. It helps ensure that T+1 does not create an unintended barrier to institutional investors, while placing responsibility on brokers, custodians and other operators to maintain effective funding and operational controls.
Strengthening Post-trade Infrastructure
CSCS has continued to strengthen Nigeria’s post-trade infrastructure through investments in technology, process enhancement, risk management and operational resilience. These initiatives support CSCS’ broader responsibility as Nigeria’s central securities depository and provider of clearing, settlement, warehousing and related post-trade services across multiple asset classes.
CSCS’ infrastructure supports a number of different security types / instruments. Its clearing and settlement framework incorporates netting, risk-management controls, default- management procedures and Delivery-versus-Payment (DVP) settlement, helping to ensure that the transfer of securities is linked to the corresponding transfer of funds.
There is greater automation of clearing, settlement and reconciliation processes. Also operational and default-management controls have been strengthened. There is now enhanced connectivity with exchanges, custodians and settlement banks. There is improved processing of both exchange-traded and eligible over-the-counter transactions.
There is support for gross settlement in high-value or specialised transactions, while there is continued focus on cybersecurity, business continuity and operational resilience.
There is improved digital access to depository and post-trade services and system uptime for 2026 has been 100 per cent.
Nigeria’s confirmed reclassification by FTSE Russell from Unclassified to Frontier Market status represents an important endorsement of improvements in market accessibility.
While the decision reflects reforms across the broader financial system, CSCS contributes directly to several of the market-quality factors considered important by international investors and index providers. These include settlement efficiency, asset servicing, depository reliability, custody connectivity, operational resilience and the transparent management of settlement obligations.
The implementation of T+1 prompted additional consideration of whether the shorter cycle might create a de facto funding requirement for international investors. Engagement among the market authorities, international custodians and institutional investors helped address these concerns. FTSE Russell subsequently confirmed that no material settlement,
operational or funding issues had been observed following the introduction of T+1.
Through reliable depository and settlement infrastructure, CSCS helps translate executed
trades into completed transfers of cash and securities. This operational certainty is essential to investor confidence and to Nigeria’s continued integration into global investment indices.