OK, let me start with the confirmation details: The Central Bank of Nigeria (CBN) has officially confirmed that its Scripless Securities Settlement System (S4) is now fully operational as the sole infrastructure (exclusive gateway) for primary market auctions of government securities such as treasury bills and, by extension, other federal government instruments.
The confirmation, provided in response to Nairametrics's enquiries, cements S4 as the only framework through which bids are submitted, prices are determined, and securities are allocated in Nigeria’s sovereign debt market. Now, all investors must submit their bids through authorised banks, which transmit them via the S4 interface.
It also reflects recent activity in February 2026’s treasury bills auction cycle, where the Federal Government offered N150 billion in 91-day bills, N200 billion in 182-day bills and N800 billion in 364-day bills under a fully centralised electronic process. It cements S4 as the only framework through which bids are submitted, prices are determined, and securities are allocated in Nigeria’s sovereign debt market.
The S4 replaces older methods involving physical submissions or decentralised bid aggregation through intermediaries. S4 now handles key functions in the auction process, including bid receipt, price discovery, allocation, and settlement instructions, all within a centralised system.
Market participants have described this transition as a significant structural shift in Nigeria’s fixed-income market that is reshaping the roles of intermediaries like Primary Dealer Market Makers (PDMMs). Instead of acting as informational conduits or aggregation points, dealers now primarily serve as bid transmitters and liquidity facilitators.
The system helps ensure auctions are transparent and that information flows efficiently among participants and regulators. In CBN's latest auction notice and operational guidelines for the February 4 NTB auction, the apex bank made it clear that only authorised banks can transmit bids on behalf of investors, with all submissions converging directly within the S4 interface.
Restricting bid submission to banks also reinforces regulatory oversight, as banks act as vetted intermediaries between investors and the central bank, reducing operational risk and improving compliance.
Important of the full S4 deployment
Scripless Securities Settlement System (S4) is a centralised, electronic securities settlement and depository platform managed by the CBN. It facilitates dematerialised holdings of securities, book-entry transfers, and the processing of auctions and settlements for eligible instruments such as Nigerian Treasury Bills and Federal Government Bonds.
The full operational use of S4 is important because it formally consolidates the CBN’s control over how government securities are issued in the primary market to ensure that all auctions are conducted through a single, standardised digital platform. So, the full deployment of S4 carries several important implications, including greater transparency, system efficiency, policy visibility, and market structure evolution.
Notably, the S4 interface has been in existence since 2014, and during those times, it was never actively deployed as the exclusive gateway for auction submissions until last year. In late 2025, CBN re-activated the system after a brief suspension due to technical challenges, but this time, it was re-activated for electronic bid submission.
Under the old arrangement, government securities auctions depended heavily on physical or proxy bid submissions, either through the CBN’s Issue Office in Lagos or via Primary Dealer Market Makers (PDMMs), who typically aggregated bids for brokers, institutional investors and other market participants. That process is now being phased out.
Following concerns highlighted in a circular issued last year, where the CBN signalled its resolve to clean up the government securities market and address structural weaknesses, the apex bank has moved to migrate the entire auction process to a single, centralised digital platform that treats all dealers equally.
By placing the CBN squarely at the heart of primary market execution, the full rollout of S4 is expected to influence how yields are formed, how securities are allocated and how investors position themselves in the fixed-income market. Given the central role of Treasury bills and government bonds in funding government operations and serving as benchmarks for interest rates, the reform marks a clear turning point in how the market is organised and administered.
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