The Central Securities Clearing System Plc (CSCS) has welcomed FTSE Russell’s decision to proceed with Nigeria’s reclassification from Unclassified to Frontier Market status, effective from the opening of trading on September 21, 2026.
CSCS said the decision reflects growing confidence in Nigeria’s capital market infrastructure and the reforms implemented to improve market efficiency, resilience and alignment with international standards.
The clearing and settlement company said the FTSE Russell review gave Nigerian capital market stakeholders an opportunity to demonstrate that the country’s transition to a T+1 settlement cycle could work effectively for domestic and international investors while preserving the protections of the Delivery versus Payment (DvP) framework.
Nigeria’s T+1 settlement transition
Nigeria moved from the previous T+2 settlement cycle to T+1 on June 1, 2026, as part of efforts to modernise the post-trade environment, reduce settlement risks and improve the competitiveness of the Nigerian capital market.
The shorter settlement cycle had initially raised concerns about whether international institutional investors would be able to meet the compressed timeline.
There were also concerns that the reform could effectively require foreign portfolio investors to prefund transactions before trading Nigerian securities.
CSCS said subsequent engagements involving the Securities and Exchange Commission (SEC), market operators, custodians and other stakeholders clarified that foreign portfolio investors are not required to prefund their accounts when participating in Nigeria’s capital market.
FTSE Russell had delayed Nigeria’s reclassification
FTSE Russell had previously placed Nigeria’s planned return to Frontier Market status under further review after concerns emerged over the impact of the T+1 settlement cycle on international investors.
Nigeria had been moved from Unclassified to Frontier Market status during FTSE Russell’s March 2026 interim review, with implementation initially scheduled for September.
The index provider subsequently paused the process to assess whether the new settlement framework could create operational challenges for foreign investors.
The SEC had said FTSE Russell would provide a definitive decision on Nigeria’s potential return to the Frontier Market Index by the end of August.
The latest decision clears the way for the reclassification to take effect on September 21.
CSCS highlights market infrastructure improvements
CSCS said several operational improvements had been introduced to support the T+1 regime.
These include:
- Greater automation of trade notifications.
- Enhanced post-trade processing.
- Strengthened risk-management arrangements.
- Closer coordination between brokers, custodians and settlement banks.
- Continued alignment with global capital market standards.
Commenting on the development, CSCS Managing Director and Chief Executive Officer Shehu Shantali said the decision demonstrated the resilience of Nigeria’s capital market infrastructure and the collective effort behind the T+1 transition.
Shantali said the significance of the development extends beyond Nigeria’s return to Frontier Market status, arguing that the review demonstrated the market’s ability to implement major structural reforms while addressing international investors’ concerns.
He described T+1 as more than simply moving settlement forward by one day, saying the reform is intended to create a more efficient and resilient market, reduce settlement exposure and support deeper participation by domestic and international investors.
What the Reclassification Means
Nigeria’s return to FTSE Russell’s Frontier Market classification is expected to strengthen the country’s integration into international investment benchmarks and provide a further boost to efforts to attract foreign capital.
For the Nigerian capital market, the decision also validates the country’s transition to T+1 and removes a major uncertainty that had surrounded the implementation of the settlement reform. The reclassification will formally take effect at the opening of trading on September 21, 2026.
