CSCS welcomes Nigeria’s Frontier Market reclassification by FTSE Russell

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 disclosed this in a statement issued on Thursday, August 27, 2026, saying the development reinforces confidence in Nigeria’s T+1 settlement framework and the continued progress of capital market reforms.

The clearing house said the reclassification represents an important milestone for Nigeria’s capital market and reflects the reforms undertaken to improve efficiency, resilience and alignment with evolving global market standards.

What they are saying

CSCS said the review provided an opportunity for Nigerian capital market stakeholders to demonstrate that the transition to T+1 settlement can operate effectively for both domestic and international investors.

It also reaffirmed that the transition can preserve the fundamental protections provided by the market’s Delivery versus Payment (DvP) settlement framework.

The statement partly reads:

• “Central Securities Clearing System Plc (CSCS) welcomes the decision by FTSE Russell to proceed with Nigeria’s reclassification from Unclassified to Frontier Market status, with the reclassification scheduled to take effect from the open of trading on 21 September 2026.”
• “Importantly, the review provided an opportunity for Nigerian capital market stakeholders to demonstrate that the transition to T+1 can operate effectively for both domestic and international investors while preserving the fundamental protections of the market’s Delivery versus Payment (DvP) settlement framework.”

CSCS noted that Nigeria transitioned from T+2 to T+1 settlement on June 1, 2026, as part of a broader programme to modernise the post-trade environment, reduce settlement exposure and strengthen the competitiveness of the Nigerian capital market.

The clearing house said questions were raised over whether international institutional investors would be able to meet the shortened settlement timeline and whether the new cycle could effectively create a requirement for foreign portfolio investors to prefund transactions.

It said continued engagement among the Securities and Exchange Commission (SEC), CSCS, market operators, custodians and other stakeholders clarified that foreign portfolio investors are not subject to a mandatory prefunding requirement.

Get up to speed

FTSE Russell had in June 2026 halted its planned reclassification of Nigeria back to Frontier Market status and placed the country under further review.

• The index provider said the decision would allow it to assess the impact of Nigeria’s transition to the shortened T+1 settlement cycle on international institutional investors.
• FTSE Russell had expressed concerns that the shorter settlement period could effectively turn Nigeria into a prefunded market for international institutional investors.
• The SEC subsequently clarified that foreign portfolio investors are not required to prefund their accounts when trading in the Nigerian capital market.

The SEC said FTSE Russell would provide a definitive update on Nigeria’s potential return to the Frontier Market Index by the end of August 2026.

Nigeria had originally been upgraded from “Unclassified” to “Frontier Market” status during the March 2026 interim review, with implementation scheduled for September 2026.

More details

CSCS said the market has also implemented several operational enhancements to support the shortened settlement cycle, including greater automation of trade notifications, enhanced post-trade processes, strengthened risk-management arrangements and closer coordination among brokers, custodians and settlement banks.

Commenting on the development, the Managing Director/Chief Executive Officer of CSCS Plc, Shehu Shantali, said the decision affirmed the resilience of Nigeria’s capital market infrastructure and the collective effort that went into delivering the T+1 transition.

He said the significance of the development went beyond Nigeria’s reclassification to Frontier Market status, noting that the review demonstrated the market’s ability to undertake major structural reforms while responding to the requirements of international investors and maintaining the integrity of its settlement framework.

Shantali said T+1 was not simply about settling transactions one day earlier but about building a more efficient, resilient and globally competitive market, reducing settlement exposure and creating infrastructure capable of supporting deeper participation by domestic and international investors.

What you should know

Nairametrics reported a few months ago that Nigeria’s capital market community had mounted a strong defence of the country’s T+1 settlement reform after FTSE Russell suspended its planned reclassification of Nigeria to Frontier Market status.

• Market operators argued that the decision placed undue emphasis on a single operational issue while overlooking broader regulatory, technological and structural reforms in Nigeria’s capital market.
• The postponement surprised stakeholders who viewed the migration to T+1 settlement as an important milestone in improving market efficiency and aligning Nigeria with global best practices.

Operators said the delay risked overshadowing years of reforms that had positioned Nigeria for its expected return to FTSE Russell’s Frontier Market Index.

The decision by FTSE Russell to proceed with the reclassification now provides a further boost to Nigeria’s efforts to strengthen its capital market infrastructure and align its operations with global standards.